TO INCUBATE AND NURTURE BATTERY STARTUPS & SCALEUPS, EUROPE NEEDS TO UP ITS GAME!

02 April 2025

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To determine challenges of battery startups & scaleups and potential solutions, BEPA surveyed the battery innovation community. The feedback below is not a single consensus position, but a synthesis of collected insights. Challenges faced by battery startups & scaleups are like those of bigger industrial players but are more impactful for startups & scaleups since these are operating on smaller budgets and tighter timelines.

To provide a much-needed boost and strategic support to battery startups & scaleups, the future EU’s Startup and Scaleup Strategy will need to deliver on 4 main angles:

1. Investment funding and financing: Almost all respondents see funding and financing as major hurdles, especially for the scaling up phase, known for high CAPEX (capital expenditure) and OPEX (operational expenditure). Attracting investors willing to support extended R&D and scaling up timelines with long-term financing is tricky. Public investments in startups and scaleups have shown to entice more private investments by sharing the risk. Our members have expressed different ideas on public support. Suggestions cover (1) government-backed venture funds and risk-sharing programs, (2) dedicated funding schemes, (3) specialized incubators fostering collaborations with private investors. The next Multiannual Financial Framework should ensure startups & scaleups attract public financial support within a reasonable timeframe. Ideal public financial support across the startup & scaleup timeline should cover R&D, CAPEX investments and temporary output-based production support

2. Competition from Asia: The intense competitive pressure from Asian players, notably from China where there is strong government support to technology leadership, is challenging nascent battery startups & scaleups and requires strategic interventions. Three different options for dealing with this pressure were proposed by respondents, being (1) temporary protection (tariff-based and non-tariff based), (2) collaboration (via a better framework for joint ventures and/or tech transfer), and (3) diversification (the need to develop niche markets where European players can take leadership)

3. Supply chain challenges: The sector’s reliance on imported critical raw materials makes it vulnerable to price volatility and geopolitical instability, emphasizing the need for supply chain diversification and strengthening of European industrial capacities and capabilities. Respondents call for (1) supporting local mining and refining operations, (2) developing alternative battery chemistries, and (3) fostering circular economy. Through their technologies, startups and scaleups innovating upstream and downstream of the battery value chain reduce supply vulnerabilities, supporting them is key

4. Regulatory overdrive: Navigating complex EU regulations (including those related to safety, sustainability, and recycling) adds significant uncertainty and cost burdens to startups and scaleups. This can lead to investment leakage to more business-friendly destinations such as North America and Asia. To ensure their development in Europe, battery startups & scaleups call for EU to (1) clarify the regulatory agenda, (2) simplify the regulatory framework and (3) reduce the regulatory burden

In conclusion, battery startups & scaleups have the same problems as other battery companies but are more vulnerable. The expected boost and strategic support to come from the EU’s Startup & Scaleup Strategy will be key for the success of a robust battery value chain in Europe. All the best help is needed to make Europe the home of battery tech … BEPA looks forward to bridging the gap between startups & scaleups, established industry, the research community, investors, and policymakers to offer startups & scale ups the best policy framework!

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