By Nick Carey
LONDON (Reuters) – Slovak battery manufacturer InoBat said on Monday it has signed letters of intent with the Serbian government to build an electric vehicle (EV) battery factory in the Balkan country with a capacity of up to 32 gigawatt hours (GWh).
The plant is expected to open in 2025 with an initial capacity of 4 GWh.
The Serbian government has agreed to provide funding of up to 419 million euros ($431 million), including grants and tax breaks to support the project, InoBat said.
While the deal is not yet final, a source familiar with the matter said it is nearly so.
InoBat has indicated that it wants to build a giga factory in Western Europe and one in Eastern Europe.
Last month, InoBat said it had signed a letter of intent with the Spanish government to build a gigafactory in Valladolid. The statement is not a definitive agreement and other locations, including the United Kingdom, remain under consideration for InoBat’s Western European plant.
Some European battery startups are struggling to raise billions for huge gigafactories, while others, like InoBat, are focusing on expanding slowly as they win customer contracts.
InoBat will open a 45 megawatt-hour (MWh) pilot line in Bratislava early next year to produce high-performance batteries for customers to test and say it has signed customer agreements, including with German air taxi developer Lilium worth €500 million by 2030.
The company aims to build battery production capacity in 4 GWh increments – each costing around EUR 350 million – from 2025 when the contracts are signed.
InoBat is also planning a research and development facility in Indiana, which could grow into a gigafactory, in a joint venture with fintech company Ideanomics.
Ideanomics is an investor in InoBat, as are mining group Rio Tinto and Czech utility company CEZ.
($1 = 0.9719 euros)
(Reporting by Nick Carey; editing by Chizu Nomiyama)