SVOLT considers dropping plans for Saarland plants

After the Chinese battery manufacturer SVOLT declared in September that it would not realise its cell factory in Brandenburg, insiders are now reporting that the planned production of modules and packs in Saarland has also been cancelled. The background to this is said to be a fundamental decision in China.

Several people familiar with the matter told the Chinese media company Caixin that SVOLT had decided to suspend the construction of both battery factory projects in Germany. There is no timetable for the resumption of work. The reason given for this is that SVOLT is experiencing financial difficulties in China and cannot afford to operate factories abroad.

We have asked SVOLT Europe to comment on the reports. However, the Frankfurt-based company declined to comment and referred to SVOLT in China. We have also made an enquiry there and will add the statement to the article as soon as we receive a reply.

SVOLT had originally planned to set up its first cell factory in Europe in Überherrn in the Saarland; an assembly plant for battery modules and packs was to be built in nearby Heusweiler so that the cells from Überherrn could be further processed for car manufacturers on request. SVOLT announced in September 2022 that it would be setting up another cell production facility for the European market in the German region of Lusatia – with a capacity of 16 GWh.

The situation was different in May

The construction of the cell factory in Saarland had been repeatedly delayed and has not yet begun – according to the original plans, the first battery cells were to be produced in Saarland at the end of 2023. In May 2024, SVOLT then announced that it would also not be realising the planned factory in Brandenburg – it had reassessed its location strategy. In this announcement, however, it was still confirmed that the company intended to retain module and pack production in Saarland – where cells supplied from other plants were to be processed.

While SVOLT had blamed the end of the Lauchhammer project partly on political decisions and discussions (in addition to a cancelled customer project), the current decision is said to be due to internal reasons, according to the reports from China. SVOLT made the decision based on its own situation and not on technical or local political factors, said another person familiar with the matter, adding that SVOLT had to “solve the money problem first.” Another source said that the 30 billion yuan (about 3.9 billion euros) investment in the European plants was “too much for a lithium battery manufacturer the size of SVOLT.”

SVOLT Energy is in the highly competitive midfield of the Chinese battery industry. According to figures from the China Automotive Battery Innovation Alliance (CABIA), the company had an EV battery market share of 2.36 per cent in September 2024, putting it in eighth place. The market is dominated by CATL (44 per cent) and BYD (24.2 per cent). Only CALB and VW partner Gotion High-Tech have a market share of more than five per cent. Behind them are seven companies with a market share of between one and three per cent. The market prices are set by companies such as CATL and BYD, the other players have to keep up – but cannot hope for the same economies of scale as the market leaders.

The end of the SVOLT assembly would be a hard blow for Saarland. After all, it was only announced this week that the semiconductor factory announced by Wolfspeed and ZF will also not be realised for the time being. As there is still no successor solution in sight for the Ford plant in Saarlouis, hopes for a sustainable automotive and supplier industry in the state have vanished into thin air for the time being.

caixin.com (in Chinese), cnevpost.com