Battery JV's That Teach Europe Nothing

Europe wants to learn how to make batteries. What it gets instead is assembly lines.

Last week, I stumbled on a report I somehow missed when it came out — the excellent T&E-commissioned study by Carbone4 on foreign battery investments in Europe. It’s one of those documents where you read ten pages, stare at the ceiling for a moment, and mutter: So it’s not just me seeing this.

The picture they paint — and the picture in the infographic below — is surprisingly consistent with my own experience trying to localise wind turbine manufacturing years ago. Europe keeps talking about cooperation, know-how, and technology partnerships. What it is actually getting is… well, immovable property.

We talk a lot about localisation. But what gets localised?

In the ten years I’ve spent around manufacturing — wind turbines, CHP units, battery electrodes — I’ve met many people who say they localise technologies. But I don’t know anyone in Europe who has actually done it with a foreign partner in the full sense: design, IP, core processes, equipment, operations — the whole stack.

Factories, yes — Europe has plenty of those. But true localisation? Real transfer of know-how? Tell me if you know. I don’t.

And batteries are heading the same way.

A growing chorus in Europe now argues that we should “cooperate more with China” because Europe “lacks battery know-how.” On LinkedIn, every announcement about CATL in Spain or Gotion in Slovenia is met with applause emojis and optimism about Europe “catching up.”

I’m all for cooperation. But cooperation without technology transfer is not an industrial strategy - it’s outsourcing. And the report confirms that is exactly what’s happening.

My wind turbine déjà vu

When I was tasked with reaching >60% localisation of wind turbine manufacturing in Russia, I spoke to everyone who would care — Goldwind, MingYang, Siemens, GE, Vestas.

At every interaction, I had a list of components for localisation, and I pushed for it. In my conversations with Chinese manufacturers, the main message was “We will ship you all the critical components, like generators. You can localise towers and some castings.” The negotiation basically ended there.

Talking with European manufacturers was not much different. They were open to deeper localisation but on their terms. Location? They decide. Component scope? They decide. Skills transfer? Vague promises and PowerPoints.

This is exactly what I now see playing out in Europe’s battery industry.

The T&E / Carbone4 findings are blunt: battery technology transfer in Europe is simply not happening

The report analysed the two major Chinese–EU partnerships — VW-Gotion and Stellantis–CATL—and the Gotion–Inobat JV. The conclusion is not ambiguous: there is no meaningful transfer of knowledge, IP, skills, or manufacturing expertise. Here are a few highlights.

First, the ownership is lopsided. In any partnership, there are those who make decisions and those who follow. If you try to make anything in China, you will have to accept a smaller equity share and strict IP and know-how-sharing requirements. Gotion controls 80% of its JV with Inobat. CATL keeps all core technology in China. VW may own 26.47% of Gotion, but operationally, it's more of a customer than a partner. In none of the EU cases does the European partner hold decisive control over product, process, or equipment.

Second, IP transfer provisions are either “limited” or non-existent. Stellantis’ €300M in Spanish state aid came with zero requirements for technology transfer. VW’s partnership secures battery supply, not battery know-how.

Third, local supply chain development is not required. Plants rely on imported components — exactly what China wants: export of semi-knock-down kits assembled in Europe.

Fourth, fuzzy provisions for local workforce development. To understand how this will play out in practice, look to existing Asian gigafactories in Hungary. CATL and Korean plants rely heavily on temporary migrant labour with high churn, and the top managerial positions are filled by expats from Korea and China, meaning the skills built do not stay in Europe.

This is not cooperation. This is exploitation. Europe currently gives foreign manufacturers hundreds of millions in subsidies — €900M to CATL and LG alone — while attaching no requirements for technology transfer, local content, skills development, or even basic environmental safeguards.

Europe has leverage — but is shy to use it

Here’s the most astonishing part of this story. When I negotiated localisation in Russia, the only thing that helped me was the existence of strict local content rules. The market wasn’t large, but the rules were clear. Most players openly scoffed at the minuscule market size, saying it is not worth their time to even consider localisation there.

Europe today is in a stronger position than Russia ever was:

• Europe is the world’s second-largest EV market.

• China is suffering from battery overcapacity.

• The US is largely closed to Chinese suppliers.

• Chinese companies need Europe.

Yet European negotiators behave as if they were the weaker party. True, the EU doesn’t have any local content requirements, but their market size alone should be a big enough bargaining chip.

Instead of demanding knowledge transfer, Europe funds knock-down assembly. Instead of making the market conditional — Europe hands out subsidies unconditionally. Instead of requiring local hiring — Europe receives temporary migrant workers with no long-term skills retention.

On a side note, Northvolt's case is super interesting, as they also employed many migrant workers, who acquired critical skills, but were basically kicked out by the Swedish government after Northvolt’s collapse. That’s undoubtedly the best example of how to keep crucial, hard-to-develop skills in Europe.

What should Europe do? The answers are not complicated.

As the report puts it plainly, Europe risks becoming “an assembly plant, not a battery powerhouse.” The checklist Europe needs is something that has no doubt come about many times in the boardrooms and national assemblies:

• Require majority local ownership in JVs (>51%)

• Condition state aid on IP transfer and local content

• Demand training programmes and local workforce targets

• Use tariffs as leverage for onshoring

• Enforce grid-based CO₂ limits that favour local production

• Implement “Buy Europe” rules in procurement

• Define clearly what is “Made in EU”

These measures are nice to have, but not critical. What is sorely lacking is an understanding that the world is changing, a strategic vision for one’s industry and some backbone in negotiations. These alone could score Europeans better deals.

There is a caveat, however. Freedom and independence come at a price. You can’t get both technology and cheap batteries at the same time. The European car and battery industry is so squeezed that it values next-quarter earnings above long-term survival. So it sells itself on a low price, securing a battery supply in exchange for future technology independence.

When we finally decided on a technological partner in wind turbine manufacturing, we went with a small Dutch startup, not GE or Goldwind, precisely because we would get the technology and know-how we needed. We knew our turbine would be more expensive. We knew we would make many mistakes as we learned to scale up turbine manufacturing. We knew that we would have to design and fund training programs for local workers (we even created a VR exam on generator assembly).

Next time you hear about a “European–Asian partnership”… be wary, because:

• A factory is not a strategy.

• Assembly is not localisation.

• And a partnership without knowledge transfer is not a partnership — it is dependency.

Europe still has a chance to avoid becoming the world’s green-tech workshop. But it needs industrial policy with teeth, and businesses willing to take a long-term view and make hard bets. Until then, every new battery “joint venture” should be read with caution.