(Yicai) Feb. 21 -- Chinese battery and battery materials suppliers have reportedly been asked by their European clients, such as BMW, Volkswagen, and Stellantis, to start producing in Europe as soon as possible.

A staffer at a Chinese battery supplier told 36Kr that large European automakers have asked the company to produce batteries, or at least cells and cathode materials, in Europe by 2027, the Chinese tech media reported today.

A Chinese battery maker which won a large order from a European carmaker told 36Kr that it asked the client if the first batch of cells it should supply could be made in China, but the request was denied.

Last August, the European Union implemented a new battery regulation imposing significant obligations on battery manufacturers, importers, and distributors. From 2027, batteries will need to have identification documents with information about carbon intensity, raw materials and their origin, and hazardous substances for the public and recyclers, and battery manufacturers will need to compile carbon footprint reports that meet certain standards, according to the regulation.

Chinese companies may face challenges related to environmental protection laws when building plants in Europe, especially when producing graphite, an anode material for power batteries, according to industry analysts.

Moreover, carmakers from different European countries have different production requirements, 36Kr noted. For example, Germany asks automakers to use materials produced locally accounting for at least 65 percent of the battery's total cost. Meanwhile, French car companies can only use cathode materials' coating and follow-up materials made in Europe or Morocco.

China's leading battery maker Contemporary Amperex Technology kicked off production at its lithium-ion battery cells' plant in Germany in December 2022. The firm also announced last September that it would build a second factory in Europe in Hungary.

Svolt Energy Technology, another Chinese battery manufacturer, announced it would build its second overseas plant in Germany. Meanwhile, Envision Group recently said it will invest to build a zero-carbon battery factory in South Carolina in the United States.

Editor: Futura Costaglione