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French car battery group Verkor has raised more than 2 billion euros in funding for its first factory, as European start-ups rush to develop their own industries in the region amid growing threats from Chinese rivals.
Verkor’s latest round of financing, which includes 650 million euros in subsidies from the French government and new money from investors such as Macquarie Asset Management, will be used mainly to build a factory in the northern French port city of Dunkirk.
Chief Executive Benoit Lemaignan said in an interview that receiving state support has helped it attract private investors, as Europe tries to compete with U.S. President Joe Biden’s clean energy initiative known as Currency. These subsidies are encouraging.
“This is considerable public support and it shows that we are getting away with it compared to the IRA and support (for companies) in the United States,” Le Meignan said. Verkor is one of the companies favored by the United States in recent months and has welcomed Brussels’ attempts to compete by easing state aid rules.
Other investors include platinum producer Sibanye-Stillwater and carmaker Renault, with which it has signed supply contracts, as well as French infrastructure specialist Meridiam. The funding includes a €600 million loan from the European Investment Bank.
European battery groups say there is still room for localized supply chains, but they face an uphill battle competing against advances already made by Asian rivals including China’s Contemporary Amperex Technology Co., Ltd.
Lemaignan said Verkor had looked at 40 other locations in Western Europe before settling on Dunkirk last year. He added that the availability of local energy resources, including low-carbon nuclear power, helped change the decision.
Similar arguments were made by Taiwanese battery maker Huineng, which earlier this year chose the French city to build a factory. It will receive 1.5 billion euros in French state subsidies.
Lemaignan added that Verkor is also relying on a low-cost “thermal waste” and steam system developed in Dunkirk, which involves reusing heat generated by industrial processes in the area. The heat generated can be used to create lithium-ion batteries.
He said the financing took slightly longer than expected because investors have become more cautious in recent months, in part because of rapidly rising interest rates.
Verkor’s Dunkirk plant is expected to have an annual production capacity of 16 GWh, or the ability to equip 200,000-300,000 electric vehicles per year, although it may be expanded in the future. The first deliveries are planned for the second half of 2025.
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