European Commission to offer interest-free loans for EV battery makers

China has supported its EV industry with interest-free loans, and so, in the past, has the USA. Now the European Commission has opened a call for proposals worth up to €1.5 billion in interest-free loans for companies making EV battery cells in the European Economic Area.

The money comes from the Innovation Fund, which is financed by revenues from the EU Emissions Trading System.

The financing is aimed at the ramp-up phase between the first production runs and the start of commercial activity. Climate Commissioner Wopke Hoekstra calls this transition period, during which firms face heavy costs and have yet to begin generating stable revenue, “the most critical and capital-intensive phase of industrial scale-up.”

European cell manufacturers have had a tough time of late, as the Brussels Signal reports. Sweden’s Northvolt went bankrupt in 2024 and its assets were sold to a US buyer. Porsche closed its Cellforce venture in 2025 and the Stellantis-led Automotive Cells Company cancelled planned factories in Germany and Italy. Volvo Cars placed its Novo Energy subsidiary into hibernation in January and Norway’s Morrow Batteries ran into financial trouble in May.

Chinese manufacturers now account for more than 80 percent of world battery output, and European carmakers have been forced to turn to Chinese partners for cells and expertise.

The new loans can cover up to 60 percent of eligible costs, up to a maximum of €500 million per beneficiary. To qualify, projects must be sited in the European Economic Area and produce cells suitable for use in EVs. They must also have reached the ramp-up phase at the opening of the call.

Applications must be submitted before September 30.

Source: Brussels Signal