Svolt Energy, a battery maker that was spun off from Great Wall Motor (HKG: 2333), has announced the termination of its European operations. This decision came after reports surfaced that Svolt had suspended two battery factory projects in Germany.
The company confirmed that it will terminate the commercial operations of its European company and its German subsidiary, effective January 31, 2025. In a statement to local media outlet Yicai, Svolt cited the underperformance of the European electric vehicle (EV) market as the reason for this difficult decision.
Despite significant investments in Europe, Svolt expressed disappointment in the market’s failure to meet stakeholders’ expectations. As a result, the company will redirect its European business operations towards technical services, engineering services, warehousing and logistics, and after-sales operations and maintenance.
The decision to terminate its European operations also means the abandonment of plans to build two plants in Germany—a battery module and pack plant in Saarland and a battery cell plant in Brandenburg. These projects, with a total investment of €2 billion ($2.16 billion), were initially expected to bolster Svolt’s presence in Europe’s burgeoning EV market.
However, challenges in operating in its home market of China have strained Svolt’s resources, making it difficult to sustain overseas ventures. The required investment of RMB 30 billion ($4.2 billion) for the two European plants was deemed too large for Svolt to handle, leading to the suspension of the projects.
Svolt, known for its expertise in battery materials, cells, modules, packs, BMS, and energy storage technology, is one of China’s largest battery makers. Despite ranking No. 8 in the domestic power battery market with a 2.36 percent share, the company has faced setbacks in its IPO process on China’s STAR market.
Prior to Svolt’s decision, Great Wall Motor had also closed its German office, signaling a shift in strategy for the automotive group. The termination of Svolt’s European operations reflects the challenges faced by Chinese companies expanding into overseas markets amid evolving industry dynamics.
