Here is the image representing SVOLT's lithium-ion battery manufacturing plant with a focus on modern, sustainable production. （Made by ChatGPT)
October 26, 2024 - On Friday (October 25), Nikkei Asia reported that Chinese electric vehicle (EV) battery manufacturer SVOLT Energy Technology, also known as SVOLT, plans to end its European operations by January next year, citing escalating China-Europe trade disputes and declining EV sales in Europe.
On Thursday, Caixin reported that due to struggles in China’s domestic market, SVOLT has paused its two battery plant projects in Germany, as it cannot sustain the high capital costs of overseas factories.
According to a source familiar with the matter, SVOLT will wind down the operations of SVOLT Europe and its German subsidiary by January 2025, with an unspecified number of layoffs expected.
The company had already abandoned plans to open a factory this year, while construction of the other two factories has either been delayed or faced legal challenges.
SVOLT initially planned to build two factories in Germany: a battery module and pack factory in Saarland and a battery factory in Brandenburg. The battery pack project, announced in November 2020, was originally scheduled for completion by mid-2024, with a design capacity of 24 GWh and a total investment of €2 billion. The battery factory project, announced in September 2022, had an annual capacity of 16 GWh. According to Caixin, this was SVOLT’s first overseas battery factory, initially planned to commence operations in 2025, but construction was halted in mid-2023.
Caixin cited multiple market sources close to SVOLT, stating that the construction of both factories is currently stalled with no set timeline. One insider mentioned that SVOLT’s financial struggles in China make it unable to bear the costs of overseas facilities.
Additionally, sources told Nikkei Asia that a combination of factors, from sluggish EV sales in Europe to ongoing financial pressure, prompted the Jiangsu-based lithium-ion battery manufacturer to shutter its European business, including its office in Frankfurt, Germany.
As a result, the company will terminate contracts for all SVOLT Europe employees, though the number of affected employees is unclear.
SVOLT did not respond to multiple requests for comment from Nikkei Asia.
SVOLT is not the first Chinese company to reduce its presence in Europe.
In August, Great Wall Motor closed its European headquarters in Munich, laying off all 100 employees due to poor sales performance. In December last year, CATL canceled plans to expand its first overseas battery factory in Arnstadt, eastern Germany.
Chinese manufacturers face adverse factors in Europe, such as tariffs, but the slowdown in sales may be even more painful.
According to the European Automobile Manufacturers’ Association, new car sales in the EU fell by 18% year-on-year in August, with a 28% drop in Germany. The market share of electric vehicles fell by 44% year-on-year. In August, BYD sold only 218 cars in Germany, accounting for just 0.1% of the country’s total EV sales.
Founded in 2018, SVOLT specializes in developing and manufacturing automotive batteries and energy storage systems. Bloomberg reported that Great Wall Motor holds about 39.4% of SVOLT’s shares and 76.5% of the voting rights. Although Great Wall Motor does not appear on SVOLT’s list of direct shareholders in its IPO prospectus, SVOLT’s largest shareholder, Baoding Ruimao, is a wholly-owned subsidiary of Great Wall Motor’s parent company, Baoding Great Wall Holdings Group Co., Ltd. Great Wall Motor does not directly hold shares in SVOLT.
Editor: Ye Ziwei
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