Now that Europe's automakers are ramping up plans for electrified vehicles, suppliers are investing in industrial scale battery cell production in the region.
Production of lithium ion battery cells is currently concentrated in Asia's consumer electronics industry where the technology first took root, made by the likes of Korea's LG Chem and Samsung SDI, and Panasonic of Japan. Cells are exported to Europe for assembly into battery packs.
This will change now that almost all major European brands are preparing to launch electrified vehicles over the next 18 months to meet tougher CO2 emission targets that start to take effect in 2020.
Volkswagen Group estimates it needs 150 gigawatt-hours of supply by 2025 to sell a forecast 3 million full-electric cars that year.
Automakers have asked Asian suppliers to produce in Europe to help meet soaring demand, speed up delivery times and cut the costs of transporting heavy battery cells.
CATL, China's leading EV battery maker, is constructing a plant in low-wage Thuringia, eastern Germany. It will feed BMW's factory in Dingolfing, southern Germany, for the upcoming iNext full-electric crossover.
"It's lower logistics costs for us and is closer to the German vehicle plants," BMW Group CEO Harald Krueger told analysts in August.
VW brand's family of I.D. full-electric cars will roll off assembly lines in Zwickau, Germany, starting late next year. They will be powered by LG Chem cells. The Korean producer is building what it says will be Europe's largest lithium ion battery factory in Poland's coal-mining region near Wroclaw. LG Chem's domestic rival, Samsung SDI, has retrofitted one of its former plasma display panel plants in Goed, 30 km north of Budapest, Hungary, to build EV battery cells.