December 1, 2025
By Sebastian Borell
Between the combined landmass of the continents of Europe and Asia, a new energy revolution is currently unfolding. Eurasia not only contains the world’s largest battery producing companies but is also home to the top consumers. While China leads on both counts – with its ownership of over 75% of the global battery manufacturing capacity and concurrent demand for 55% of produced batteries – countries like South Korea, Japan, and Germany also have notable production capabilities. Asia’s fast-growing economies, where some of the largest populations of the world are concentrated, combined with the European Union’s ambitious goals of achieving climate neutrality by 2050 and having 70 million electric vehicles run on their roads will only continue to fuel the demand for batteries in the decades to come.
In the current market dynamics, with several countries looking to diversify their supply chains, and build further mining, refining and production plants, the whole of Eurasia will soon be involved in the battery market on either the suppliers’ or the consumers’ end – or both. Pursuing the green transition also creates opportunities for innovation, job creation in sustainable construction and green technologies, and building increased economic resilience, therefore rendering it a desired step of several governments on the path towards greater levels of development. Following the rapid expansion of demand for fossil fuels and petroleum products during and after World War II, a rush for critical minerals slated for use to build the batteries that will power the economies of the future has ensued. In this race to secure more resources and own more batteries, however, a number of damaging patterns of the fossil fuel era can be replicated in lieu of more balanced strategies that favor long-term development.
State favoritism, environmental neglect, and a lack of reinvestment and diversification are some of the policy issues that analysts are already raising alarm bells about in the global battery industry, leading some even to bankruptcy. In China, Xiamen Hithium Energy Storage Technology Co presents an example of a company suffering from such a malaise. Although not technically bankrupt, the battery producer receives a notable portion of its income in the form of subsidies from the government, without which its balance sheet would not be in the positive. In the first half of 2025 alone, Hithium received 334 million RMB in government subsidies, nearly triple the 120 million RMB it obtained during the same period in 2024, and heavily outweighing their profits. Hithium’s trade receivables turnover times also appear to be increasing. While the company required 180 days in 2024 – an already high figure – this increased to nearly 230 days in 2025, casting doubt on the management of a firm supposedly still in its growth phase. Such figures have been explained by the provision of more diversified settlement terms to foreign partners, but such lending schemes provide a risky foundation.
The company has also sought to diversify activities, opening a battery-energy-storage manufacturing facility in North Texas valued at USD 200 million. Although described as a production facility, the plant actually focuses on assembly, with most of the components, including battery cells, arriving intact from China. Such activity should not meaningfully exempt the company from tariffs, given that battery cells compose the majority of the cost in energy storage systems. Hithium utterly failed to disclose such critical information to investors, which is a blatant breach of their fiduciary obligations. As the company is looking to get listed on the Hong Kong Stock Exchange (after an initial, failed attempt), its recent track record of having missed out on a number of high-value tender projects in mainland China points to additional problems with its business model.
In the shadow of China’s decades-long infrastructure and capacity-building experience, countries in Central Asia and the Caucasus are on the rise as significant producers of the critical minerals needed for the production of such battery mechanisms in the near future. Capitalizing on the rush for lithium, copper, rare earth elements and other minerals, these governments are offering several benefits to investors in the form of cheap land, tax holidays and breaks, and a generally lax regulatory environment to make their countries more attractive destinations for business.
A lack of stringent regulations means that environmental issues seem to accompany such projects wherever they emerge. Kazakhstan is one of the countries that had to step up efforts in battery recycling and waste management due to an increase in lead and arsenic beyond safe levels in both the air and the soil around its battery factories. Recycling is still a challenge in the much more developed battery ecosystem of China, forecasting problems for the up-and-coming battery producers of Eurasia. Similarly, Uzbekistan is experiencing challenges due to its already arid climate, which exploration projects for further lithium mining are likely to exacerbate in the near future. Recent research into the expansion of the battery manufacturing industry also indicates that information about new plants is scarcely available to local populations. This is a problem in Central Asia and Europe alike. Such examples harken back to the experiences of oil and gas producing countries with the negative environmental and social impact of their fossil fuel production initiatives, raising questions about the long-term sustainability of these projects.
Sustainability, on the other hand, also appears as an issue on the governmental side. While the deployment of state subsidies has not been characteristic of the development of Central Asian countries’ battery businesses, they are common in East Asia, Europe and even the United States. China’s model has been a prime example for others in this field. China has buttressed its battery manufacturing industry with significant amounts in the form of direct grants, research and development support, and consumer purchase subsidies, increasing the competitiveness of its products by on global markets.
Investments and subsidies notwithstanding, the issue of sustainability has emerged in both Asia and Europe, following the rapid rise and similarly significant fall of certain companies. The rush to establish mining, refining and production capabilities has mobilized tremendous amounts of funding, but several companies struggle with staying competitive in a cutthroat area of business. In addition to this, infrastructure development issues, such as outdated public energy grids, have also constrained the growth of these battery producers. A rising star of the European market, Sweden’s Northvolt filed for bankruptcy earlier in 2025 after it received billions of dollars in funding, but struggled to meet its financial targets.
Eurasia stands at a crossroads. The region has the resources, geography, and ambition to become a cornerstone of the world’s clean-energy transition, but it also carries the ghosts of its fossil-fueled past. If its governments and corporate partners repeat the same extractive, opaque, and short-term practices that once defined the oil era, then the promise of ‘green growth’ will be nothing more than a new kind of dependency dressed in sustainable language.
Sebastian Borell
Sebastian Borell is a renewable energy analyst based in Europe working in the investment banking sector. With over 5 years in the industry, Sebastian has contributed to reports from the Energy Institute, RenewableUK, and Wood Mackenzie, among others. He holds an MA from the University of Hagen.
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