European Commission to Offer Interest-Free Loans for EV Battery Makers
Up to €1.5 billion available for companies in ramp-up phase; applications close September 30
The European Commission has opened a call for proposals worth up to €1.5 billion in interest-free loans for companies manufacturing EV battery cells in the European Economic Area, as the bloc seeks to support its struggling domestic battery industry.
What Happened
The financing comes from the Innovation Fund, which is financed by revenues from the EU Emissions Trading System. The funding is aimed at the ramp-up phase between first production runs and commercial activity startup, a period Climate Commissioner Wopke Hoekstra called 'the most critical and capital-intensive phase of industrial scale-up.' Loans can cover up to 60 percent of eligible costs, with a maximum of €500 million per beneficiary. To qualify, projects must be sited in the EEA, produce cells suitable for EVs, and have reached the ramp-up phase at the time of application. Applications close September 30.
Why It Matters
European cell manufacturers have faced significant setbacks recently. Sweden's Northvolt went bankrupt in 2024 and its assets were sold to a US buyer. Porsche closed its Cellforce venture in 2025, while the Stellantis-led Automotive Cells Company cancelled planned factories in Germany and Italy. Volvo Cars placed its Novo Energy subsidiary into hibernation in January, and Norway's Morrow Batteries ran into financial trouble in May. Chinese manufacturers now account for more than 80 percent of global battery output, forcing European automakers to rely on Chinese partners for cells and expertise.
The Bottom Line
The loan program represents a direct effort to reverse the decline of European battery manufacturing by targeting the capital-intensive transition period between pilot production and commercial viability.
