December 12, 2025
SEOUL – As China’s battery titans face a glut at home and growing political headwinds in North America, they are redirecting their firepower toward Europe — the world’s second-largest EV market and, increasingly, the main battleground for global battery dominance.
Backed by aggressive pricing and massive scale, Chinese suppliers are rapidly expanding through exports even before their landmark European plants come online, squeezing the space once firmly held by Korea’s LG Energy Solution, Samsung SDI and SK On.
With Europe preparing tighter scrutiny of Chinese supply chains — though still far lighter than Washington’s clampdown — Korean battery makers are wagering that regulatory pressure, combined with more Europe-specific product strategies, could slow China’s advance and help them defend market share.
CATL has broken ground on its joint plant with Stellantis in Spain, while its standalone Hungary site is set for mass production next year. Together with its smaller German operation, CATL’s European capacity is projected to exceed 160 gigawatt-hours — enough to power more than 2 million EVs.
China’s push comes just as Brussels moves to cut reliance on Chinese supply chains. The EU’s Net Zero Industry Act calls for at least 40 percent of the bloc’s batteries to be produced locally by 2030, while the Carbon Border Adjustment Mechanism imposes carbon-linked tariffs.
Yet the early edge Korean firms gained by building plants in Hungary and Poland is eroding fast. According to SNE Research, their collective European market share has plunged from 60.4 percent in 2023 to the 30-percent range in 2025, while Chinese suppliers are climbing toward 60 percent. The trajectory is especially unsettling given CATL’s strategic location in Hungary, flanked by Europe’s biggest automakers — Mercedes-Benz, BMW, Stellantis and Volkswagen — many of which are core customers for Korea’s battery trio.
Europe is preparing tougher screening on foreign investment and launching antisubsidy probes targeting Chinese EV and battery firms that have benefited from heavy state support. But insiders caution the impact may prove limited.
An expert on EU regulations noted that Brussels’ ambitions have already been tempered. “The EU initially sought rigorous disclosure rules on carbon footprints, due diligence and battery passport reporting. But recent omnibus amendments have softened some requirements, creating mixed regulatory signals.”
Business interests are diverging even more sharply among EU members. Countries such as Hungary continue to court Chinese investment, complicating any attempt at unified EU action. “In the end, whether it’s Hungary or Spain, business priorities prevail, and new battery plants are inevitable,” the expert said. “Even if Europe tightens the rules, it would take a far bigger regulatory leap to meaningfully constrain a player like CATL.”
Kim Tae-hwang, an international trade professor at Myongji University, added that Europe’s geopolitical posture remains intentionally blurred. “The EU aligns with US concerns over China, but avoids a full break, making a sharp turn in either direction unlikely. This means China faces pressure, but not US-style sanctions.”
Facing a tougher competitive landscape, Korean battery makers are diversifying their product mix — expanding beyond premium, long-range cells into mid-range and mass-market batteries — while accelerating a pivot into lithium iron phosphate, a chemistry long dominated by Chinese suppliers.
“In Europe, drivers tend to travel shorter distances and rely more on fast charging, so they don’t necessarily need high-nickel cells,” an industry source said. “Korean suppliers will increasingly pivot from high-nickel to mid-nickel and eventually into LFP, which is improving in performance closer to mid-nickel.”
LG Energy Solution’s recent 2 trillion won ($1.4 billion) supply contract with Mercedes-Benz underscores the shift. While chemistry details were not disclosed, industry officials expect the batteries will be mid-nickel NCM cells geared for the automaker’s mid-priced EV lineup.
The source also cast doubt on whether CATL’s planned 160 gigawatt-hours of European capacity is realistic, noting it risks replicating China’s own oversupply problem. Even at their peak in 2023, Korean suppliers shipped only tens of gigawatt-hours to Europe collectively — a stark contrast to the scale China now aims to build on European soil.