Author: Nian Xiaoman, Editor: Shui Jing
I have interacted with many Europeans who are quite distinctive. In any chat or gathering, even at a business dinner with a counselor from a certain country's embassy, the conversation among Europeans eventually turns to women. They never spare their praise for women and are never shy about expressing affection, which forms a sharp contrast with the reserved and implicit traditional Chinese culture.
Initially, I was quite unaccustomed to this. Over time, I gradually came to understand that this is a humanistic trait deeply rooted in the local culture, and I calmly embraced and gladly accepted this unique European gentleness, teasing, and praise.
Europe is a treasure land with profound history, diverse culture, and absolutely beautiful natural scenery, which is also the core reason why domestic outbound tourists mostly choose Europe as their first destination over the years. Before my first trip to Europe, I specifically rewatched movies like "Sissi", "The Unbearable Lightness of Being", and "The Grand Budapest Hotel" full of dark humor, encountering Europe's romance and profundity in advance through the stories in light and shadow.
However, only after traveling there in person did I realize that the beauty of Europe is never found in the superficial check-in spots for internet celebrities. Many niche small towns are worth stopping at and staying for a few days. Only by slowing down and calming the mind can one truly understand the historical heritage, humanistic context, and natural scenery of this land.
Today, this European continent, which combines romantic vitality and profound heritage, not only hides the ultimate beauty of humanities and nature but also conceals huge development opportunities in the new era. Chinese energy storage enterprises have deeply participated in it, gradually outlining and reshaping the global new energy development map, and even future trends.
According to the "2025 China Investment in Europe Report" jointly released by Rhodium Group and the Mercator Institute for China Studies, China's foreign direct investment (FDI) in Europe (the EU and the UK) rebounded for the second consecutive year in 2025, reaching the highest level since 2018. The annual investment increased by 67% year-on-year, reaching 16.8 billion euros. Europe's share of China's global outbound FDI rose to nearly a quarter, up from 17% in 2024.
According to incomplete statistics from the 24chao Industry Research Institute (TTIR), as of August, 20 Chinese energy storage enterprises, including CATL, EVE Energy, Envision, Hithium, CALB, Sunwoda, Sungrow, BYD, XTC New Energy, Easpring Material Technology (Easpring), Shanshan Co., Ltd., Yunnan Energy New Material, Senior Technology Material, Tinci Materials, and Trina Storage, have invested over 28 billion euros (approximately CNY 220 billion) in Hungary. These investments cover core fields such as energy storage batteries (including power batteries), system integration, positive and negative electrode materials, battery separators, and electrolytes.
However, the market is recently concerned that if some accidental events, such as the BYD revolving door incident and the compliance penalties encountered by Yunnan Energy New Material's Hungarian factory, are defined by Europe as "common industry problems," they may use this as an excuse to take intensive and strict regulatory and punitive measures against the entire Chinese-funded energy storage industry chain. This will undoubtedly have a profound impact, or even a shock, on the hundreds of billions of CNY in investment layout of Chinese enterprises.
Recently, a piece of news from foreign media has deepened market concerns. According to a report by the Nikkei on September 11, the Hungarian government plans to establish a new agency as early as September to specifically supervise the environmental compliance of battery factories. This agency is expected to have the power to conduct on-site inspections and order production suspensions. Laszlo Gajdos, Hungary's Minister of Living Environment, further emphasized that factories failing to comply with regulations will be closed, pointing directly at Chinese-funded new energy enterprises in Hungary.
Today, "go global or go out of business" has almost become an industry consensus. This article aims to systematically review the investment layout of Chinese energy storage enterprises in Europe, as well as the root causes of European policy changes, and discuss with readers "how 'Chinese power' can navigate the storm of European industrial and political gaming." It is intended to spark discussion and is for reference only. Readers are also welcome to supplement, correct, or even criticize.
Under the Deep Gaming of Global Energy, China's Energy Storage Industry Chain Bets CNY 220 Billion on Europe
Amid the continuous gaming of global politics and energy, to get rid of energy dependence, Europe is making all-out efforts to promote green and low-carbon transformation. Against this backdrop, European countries have successively introduced unprecedented energy storage industry support and incentive policies, further unlocking the growth potential of the new energy, especially the energy storage market.
On June 26, local time, the EU officially signed the "Trilogue Agreement on Energy Storage." This agreement brings together EU member states, energy storage developers, renewable energy producers, energy-intensive industries, and financial institutions. The policy points out that the energy storage scale required by the EU energy system before 2030 is about 200GW, while the installed capacity at the beginning of 2026 is only about 55GW. This means that about 145GW still needs to be added from 2026 to 2030, corresponding to an average annual addition of about 29GW, an increase of about 140% compared to the newly added scale in 2025 (12GW).
To enhance local manufacturing capabilities and competitiveness, on September 9, the European Commission officially adopted a proposal for a public procurement regulation. For public procurement and subsidies in strategic sectors such as electric vehicles and batteries, it puts forward requirements similar to "Made in Europe," stipulating that a certain proportion of products must originate from the EU. For example, in public procurement, if the EU proportion or the proportion of suppliers from covered third countries is less than 50%, public buyers can reject the bid, thereby further strengthening local manufacturing requirements.
Relying on forward-looking strategic layout, China's energy storage industry chain is now becoming one of the most powerful industrial players in Europe.
According to incomplete statistics from the 24chao Industry Research Institute (TTIR), as of August, 20 Chinese energy storage enterprises, including CATL, EVE Energy, Envision, Hithium, CALB, Sunwoda, Sungrow, BYD, XTC New Energy, Easpring, Shanshan Co., Ltd., Semcorp, Shenzhen Senior Technology Material, Tinci Materials, and Trina Storage, have invested over 28 billion euros (approximately CNY 220 billion) in Hungary. These investments cover core fields such as energy storage batteries (including power batteries), system integration, positive and negative electrode materials, battery separators, and electrolytes.
Based on the details of industrial layout in various countries, four core layout characteristics of China's energy storage industry chain in Europe can be summarized:
First, large production capacity scale and high strategic priority. Europe is the core strategic position for the overseas energy storage layout of Chinese-funded enterprises. The planned production capacity accounts for over 50% of the total overseas production capacity. Industry leading enterprises have laid out core production capacity projects in Europe, with a single project investment scale generally reaching hundreds of millions or even tens of billions of euros.
Second, collaborative layout of the entire industry chain with tight binding of upstream and downstream industries. The overseas expansion model has shifted from the past single-point overseas expansion of cells and materials to the collaborative overseas expansion of the entire industry chain, including "cells + PCS + system integration + upstream key materials." Material enterprises, cell enterprises, and system integration enterprises are simultaneously laying out industrial clusters in Europe. The landing areas are highly concentrated, forming an industrial cluster supporting pattern similar to that in China, which greatly optimizes supply chain costs and enhances supply chain security capabilities.
Third, the adaptability between manufacturing capacity layout and market demand distribution is steadily improving. From the perspective of regional division of labor, the layout of Chinese-funded enterprises in Europe has formed a clear gradient pattern, with resource allocation highly matching market demand. The industrial positioning of each region is clear, and the functional complementarity is strong. Spain is the manufacturing center of Southern Europe, responsible for covering the market demand in Southern Europe and the southern end of Western Europe; Germany is the high-end R&D and market verification center, leading the technology and brand operation in the European high-end market; Poland is the regional assembly, distribution, and operation and maintenance center in Central and Eastern Europe, responsible for covering the Central and Eastern European market and providing regional supporting delivery services; Romania is an emerging project market and an incremental layout fulcrum for Chinese-funded enterprises in Central and Eastern Europe; Hungary, as a regional backup production capacity base, continuously covers the supporting needs of surrounding markets.
Fourth, localization and joint venture cooperation have become the mainstream landing models. Under the constraints of the EU's rules of origin and foreign investment supervision policies, coupled with the lessons from the changes in Central and Eastern Europe, pure wholly-owned greenfield projects are no longer the preferred option for enterprise layout. Leading enterprises generally adopt the cooperative model of "joint venture factory construction + local industrial binding." For example, they establish joint ventures with European leading car manufacturers and energy enterprises such as Stellantis, Volkswagen, and Renault, with each holding about 50% of the shares. This deeply binds the Chinese side's technological and production capacity advantages with the European side's supply chain channels, local qualifications, and policy resources, effectively avoiding trade barriers, policy reviews, and geopolitical risks.
However, in the process of rapid expansion of Chinese-funded enterprises, we also need to clearly realize that they are facing an increasingly complex external environment. For example, the EU has set multiple barriers in terms of policy supervision, environmental protection standards, supply chain supporting, and local operation. Coupled with the superimposed effects of market competition and financing reviews, the investment promotion process of Chinese enterprises in Europe is full of challenges.
Compliance Storm Impacts the European Map of China's Energy Storage Industry
The recent compliance incidents involving CATL and Yunnan Energy New Material are being characterized by the new Hungarian government as "common industry problems," and using this as an excuse, they have taken intensive and strict regulatory and punitive measures against the entire Chinese-funded energy storage industry chain. These measures may extend to the whole of Europe, covering the entire industry chain from upstream materials to downstream system integration, causing the overall expansion rhythm of Chinese-funded enterprises to be significantly disrupted.
Tarkanyi, then a member of the ruling Tisza Party in Hungary and Parliamentary State Secretary of the Ministry of Transport and Investment, stated in an interview with local media in late May this year that the new government would not support CATL's expansion plan to build a second and third factory next to its existing site in Debrecen.
This means that the originally planned phase II and phase III capacity expansions, as well as the supporting incremental investment plans, may be completely shelved. The long-term capacity expansion rhythm of enterprises in the European market is completely disrupted. As the chain leader, the rejection of CATL's expansion plan will undoubtedly have a profound impact on the upstream and downstream of the industry chain.
The phase I project of Yunnan Energy New Material, a leading lithium battery separator enterprise, at its Hungarian factory, has been comprehensively ordered to suspend production by local regulatory authorities. All activities in the factory area, including production, warehousing, and operation, have been halted. The construction progress of the phase II project has also been postponed indefinitely. This situation not only directly affects the enterprise's own capacity release rhythm but will also indirectly drag down the supply chain supporting stability of downstream cell enterprises.
Although projects of enterprises such as EVE Energy and Sunwoda have not been directly subjected to compliance penalties at present, a series of regulatory policy adjustments by the new government have significantly raised the threshold for subsequent project expansions. The subsequent capacity expansion plans of these two enterprises will face stricter environmental reviews, longer approval cycles, and higher compliance cost pressures.
Although the BYD revolving door incident did not directly negate BYD's investment in Hungary and is temporarily a compliance retrospective driven by domestic political pressure, it has also significantly elevated the policy, public opinion, and compliance risks for Chinese-funded enterprises in Hungary. The employment of former government officials by foreign-funded enterprises has become a target of public opinion, and the compliance cost for enterprises to hire former public servants locally has increased substantially. There is a possibility that BYD's historical approvals, subsidies, and land agreements will be re-reviewed, and existing projects need to have a complete set of archives and compliance traces. The EU's "Foreign Subsidies Regulation (FSR)" and the new battery regulations, together with Hungary's national review, form dual supervision, significantly increasing the compliance workload for Chinese-funded enterprises.
A more landmark event recently is that, according to a report by the Nikkei on September 11, the Hungarian government plans to establish a new agency as early as September to specifically supervise the environmental compliance of battery factories. This agency is expected to have the power to conduct on-site inspections and order production suspensions.
Hungarian economist Bernadett Szel believes that the Tisza Party led by Péter Magyar emphasizes reconnecting with Western economic networks and value chains, pointing towards diversification, which also means reducing "one-sided dependence" on China.
Hungary is a typical microcosm of Chinese-funded investment in Europe. Friendly bilateral relations do not mean zero investment risks. Even if strong support from high-level government officials was obtained in the early stage, once personnel changes or public opinion storms occur, projects may encounter retrospective reviews. For Chinese new energy enterprises going global to Europe, they cannot rely solely on high-level relations. They must strengthen local compliance and local public opinion management, diversify country layouts, and reduce the impact brought by policy fluctuations in a single country.
Future Development Trends and Inevitable Challenges of China's Energy Storage in Europe
We analyze and believe that, based on the current layout progress and European industrial policy orientation, the layout of China's energy storage industry chain in Europe will present four clear industry trends:
First, the production capacity layout will further concentrate in Western and Southern Europe, and the proportion in Central and Eastern Europe will continue to decline. Spain, Germany, and Poland will become the three core countries for the layout of Chinese-funded energy storage, and the industrial proportion in Central and Eastern Europe will gradually decline. Spain's PERTE VEC special plan and stable policy environment will continue to attract Chinese-funded manufacturing capacity; Germany's position as a high-end market will be further strengthened; Poland will consolidate its position as a regional assembly, distribution, and operation and maintenance center, forming a more efficient regional division of labor pattern.
Second, the industry chain will continue to extend to high value-added links, shifting from capacity output to value output. Chinese-funded enterprises will shift from being pure equipment suppliers and manufacturing providers to overall solution providers and joint operation cooperation partners, possessing the integration capacity of the entire industry chain. At the same time, they will extend to upstream high value-added material links, covering new tracks such as battery recycling and cascade utilization. They will obtain returns from high value-added links through technology, standard, and service output, no longer limited to the single profit of the manufacturing end.
Third, the service radius of European manufacturing capacity will further shrink, and the local supporting rate will continue to increase. Affected by multiple factors such as the EU's rules of origin, carbon tariffs, and logistics costs, the capacity laid out by Chinese-funded enterprises in Europe in the future will basically take meeting the local market demand in Europe as the core purpose. Products will mainly be supplied nearby to the market demand of surrounding countries, and the service radius will significantly shrink. At the same time, with the gradual release of upstream material and component capacity after 2027, the local supporting rate of European manufacturing projects will continue to increase, and supply chain costs and risks will be further optimized.
Fourth, the layout rhythm will shift from rapid expansion to layout on demand. The planned production capacity will be released according to the actual demand release rhythm in Europe, maintaining rationality and controllability. Facing the high compliance threshold and fierce market competition in Europe, coupled with the rational guidance of domestic policies on overseas investment, enterprises will no longer purely pursue scale expansion. They will comprehensively consider the actual growth potential of the European market, project landing conditions, compliance costs, return cycles, and local supply chain supporting capacity, determine the production progress on demand, avoid over-investment, and make the layout rhythm more rational.
Looking ahead, we analyze and believe that the development of China's energy storage industry chain in Europe will face multi-dimensional and deep-seated challenges. These challenges are not a single policy or trade restriction, but a combined and full-chain constraint, which will restrict the layout of Chinese-funded enterprises for a long time and is also the core risk constraint for the layout of industry enterprises.
Among them, policy and compliance risks are the most core and long-term challenges faced by Chinese-funded enterprises in Europe. In recent years, the EU has introduced multiple industrial policies, setting layer upon layer thresholds in terms of product access, localization requirements, capital end, and supervision end, forming a full-chain compliance constraint on Chinese-funded enterprises, which will completely rewrite the competition rules in the European market.
We suggest that Chinese-funded enterprises should take compliance as a prerequisite hard constraint for European layout, establish a compliance management system covering the entire process of product R&D, production, and supply chain, and lay out in advance the compliance capacity building of carbon footprint, battery passport, and rules of origin. They should prioritize the use of production processes, energy, and raw materials with low carbon footprints, and lay out the digital traceability capacity of the entire process in advance. They should deeply study the policy rules of the EU and host countries, increase compliance investment, adjust the supply chain and carry out technology iteration under the premise of compliance, and build compliance capacity into the core competitiveness of enterprises. They should make full use of the industrial policies and subsidy support of the EU and host countries, reasonably plan the landing rhythm of production capacity, and reduce compliance costs.
From a longer-term business perspective, Chinese-funded enterprises should shift from pure product competition and cost competition to the competition of comprehensive service capacity, technological capacity, and brand capacity, avoiding the risk of pure price competition. On the product end, they should continuously match the technical needs of Europe's long-duration energy storage and high-end markets, focusing on R&D of energy storage technical solutions that meet Europe's high carbon standards and high grid requirements. On the value end, they should shift from a single equipment supplier to a comprehensive solution supplier of "product + service + operation," focusing on cutting into high value-added links, locking in project returns through long-term operation services, and reducing reliance on the single profit of the manufacturing end. On the brand end, relying on the benchmark verification effect of high-end markets such as Germany, they should strengthen the construction of brand, channel, and post-operation and maintenance capabilities in the European region, enhance the brand trust of terminal customers, and build differentiated competitive advantages.
From the perspective of long-term industrial development, we believe that the underlying logic of Sino-European energy storage industry cooperation has not changed, and the complementarity between China's energy storage industry chain and European industries will still exist for a long time. Despite facing many challenges, the layout of Chinese-funded enterprises in Europe still has significant room for development. Through localized layout, compliant operation, and full industry chain synergy, deeply integrating their own technological and production capacity advantages with European market demand and industrial resources will be the key factor to cross the industrial cycle and achieve long-term development.