Southeast Europe is already home to high-profile electro-mobility companies such as Croatian electric hypercar producer Rimac and electric aircraft pioneer Slovenian Pipistrel. Now, as demand for electric vehicles (EVs) increases, the region is also becoming a location for battery manufacturing. 

Further north, Central Europe is already known as an attractive destination for manufacturers of the batteries needed in EVs. The country offers decades of automotive expertise that has seen it emerge as a hub for car and car part manufacturing since the early years of the transition, combined with still lower costs than most of Western Europe. 

Not only does having battery manufacturing closer to the car factories of Central Europe and Germany become more convenient than shipping them in from elsewhere; the disruption to supply chains from the pandemic and concerns that China might leverage its position as the leading battery manufacturer if trade wars ratchet up have made European politicians and companies look with urgency at producing batteries on their home turf. 

Hungary in particular aims to become a global hub for EV battery production, with dozens of projects from across the entire value chain, from material suppliers to recycling. The country is currently the fourth-largest producer of EV battery cells and by 2030 total capacity could reach 250 GW, the highest in Europe and the second-highest globally after China.

Now, Southeast European countries are also attracting investments into EV battery production. Several years behind their CEE counterparts in terms of FDI, and with disadvantages in terms of lower productivity and less good infrastructure, they do nonetheless offer less competitive labour markets (unemployment is still high in much of the region) and lower costs. 

The region has already produced some electro-mobility champions, most notably Croatia’s Rimac Group. Rimac has been rapidly expanding and has become a significant global player. In November 2021, it launched a joint company with Bugatti Automobiles, Bugatti Rimac. The Rimac Group is the majority shareholder in the new company, with a 55% stake.

The company’s latest financing round of €500mn put the company’s value at over €2bn.

The latest news announcement from Rimac, incidentally, is of its new partnership with EVE Energy, a lithium battery manufacturer specialising in the 46xx cylindrical cell format. The partnership aims to meet the rising demand for sustainable energy solutions in Europe while strengthening the local supply chain. Starting in 2027, EVE Energy will oversee battery cell manufacturing, while Rimac Technology will focus on developing and producing battery modules and packs, primarily for Rimac's 46xx platform.

Neighbouring Slovenia, meanwhile, has produced Pipistrel, whose two-seat Velis Electro plane was the first electric aircraft in the world to get certified by the European Union Aviation Safety Agency (EASA). 

Elsewhere in the region, there is growing interest among manufacturers in setting up production of batteries in Southeast Europe. 

North Macedonia is already well established as a popular location for auto part manufacturing, with investors encouraged to set up in the country’s FEZs. 

Earlier this month BMZ, a German company specialising in lithium-ion battery production, committed to investing €65mn in the free industrial zone near North Macedonia’s capital Skopje. 

Four months earlier, the Macedonian government announced that a Belgian engineering firm specialising in advanced battery solutions, Avesta Battery and Energy Engineering (ABEE), was ready to build an electric car battery production facility in the Kicevo FEZ. A deal that, officials said, should pave the way for further advancements in the EV industry in the country.

The automotive industry already has an important role in the Macedonian economy in terms of exports and – even though few people in North Macedonia can afford an EV – the country is already transitioning to electric battery projects. 

Serbia is also entering the EV space. US-based EV manufacturer Rivian has opened a technological centre in the Belgrade. Stellantis, owner of the automotive factory at Kragujevac, has started preparing to switch to electric car production.

In the battery manufacturing space, Slovakia-based EV battery technology company InoBat signed a declaration of intent with the Serbian government on the construction of a major new EV battery factory in December 2022.

The new gigafactory will help to meet the growing demand for electric car batteries in Europe. Serbia is an increasingly important destination for manufacturing auto components.

The factory project will be supported by the International Finance Corporation (IFC), part of the World Bank group, via its early-stage project development engagement with InoBat.

Ary Naim, IFC regional manager for Central and Southeast Europe, said: “Serbia is well positioned to continue attracting manufacturing investment, and become a centrepiece for the e-mobility revolution in Europe, creating new jobs and opportunities in the economy of tomorrow for decades to come.

“An InoBat gigafactory in Serbia could serve as the anchor that will catalyse much more investment up and down regional manufacturing value chains,” he added. 

In April, ElevenEs announced the opening of Europe’s first LFP battery cell factory in Subotica, Serbia. The factory is dedicated to producing high-quality LFP prismatic cells for various applications, including electric cars, buses, trucks and energy storage systems. 

LFP (lithium iron phosphate) battery cells are gaining popularity in the industry due to their increased safety, lower cost and sustainability, as they do not use nickel or cobalt. They also have a longer lifespan compared to competing technologies.

Having opened the manufacturing facility, ElevenEs says it plans to expand it into a mega-factory in 2024, producing 500 MWh, focusing on C and D samples. 

“The expansion of our R&D centre and opening of our first production facility in Serbia is a huge milestone for ElevenEs and the European battery cell market as a whole. We’re proud of our contribution to reducing the global footprint starting with our battery cells’ local production,” said Nemanja Mikac, ElevenEs CEO, at the time. 

Some significant announcements have come out of Romania too, the region’s biggest economy, with a sizeable automotive parts industry. Romania will produce EVs starting from the year 2024, when Ford will start the assembly of a utility vehicle with an electric propulsion system in Craiova, while Dacia is planning to produce an electric car two years later.

This spring it was reported that the government was signing a memorandum of understanding (MoU) with the Canadian company RockTech Lithium on the construction of a factory of raw materials and battery components for electric cars in Romania. 

Just days later, it was revealed that German group Varta was looking for 100 hectares of land close to Arad, in western Romania, as a potential location for a €1bn EV battery plant, Economedia reported, quoting sources familiar with the negotiations. Varta’s subsidiary Varta Microbattery already operates a local battery factory in Brasov, where it has hired 447 people and reported revenues of around €90mn in 2020.

The German company Dräxlmaier is also targeting Southeast Europe, including Romania. Back in 2021, the mayor of Timișoara, western Romania, announced the company planned to invest €200mn in a factory in the city in the next six years, where it wants to produce batteries for electric cars. 

It was also announced in November 2021 that the company was issuing a €350mn ESG-linked Schuldschein to back investments in Romania, Moldova and North Macedonia, to accelerate the implementation of its low-carbon strategy in the three countries, including through the development and production of components essential for the electrification of transport, such as high voltage harnesses and battery systems.