EU Launches €1.5 Billion Loan Program with Up to €500 Million per Beneficiary
On August 10, the European Commission officially opened a call for proposals offering up to €1.5 billion in interest-free loans, specifically targeting companies producing electric vehicle (EV) batteries within the European Economic Area. The funding is sourced from the Innovation Fund under the EU Emissions Trading System and is designed to support battery manufacturers during the critical ramp-up phase from pilot production to commercial-scale manufacturing. Climate Commissioner Wopke Hoekstra described this period as "the most critical and capital-intensive phase of industrial scale-up."
According to the European Commission’s announcement, the loans can cover up to 60 percent of eligible costs, with a maximum of €500 million available per beneficiary. Applicants must be based in the European Economic Area, produce batteries suitable for EVs, and have already entered the ramp-up phase by the time of the call’s opening.
European Battery Industry Faces Crisis as China Dominates 80 Percent of Global Output
In recent years, Europe’s EV battery industry has faced severe challenges, with several prominent manufacturers exiting the market. Swedish battery maker Northvolt declared bankruptcy in 2024, and its assets were subsequently acquired by a U.S. buyer. In 2025, Germany’s Porsche shut down its battery joint venture, Cellforce. The Stellantis-led Automotive Cells Company canceled plans to build battery factories in Germany and Italy by 2026. Volvo Cars placed its battery subsidiary, Novo Energy, into hibernation in January 2026, while Norway’s Morrow Batteries encountered financial difficulties in May 2026.