EcoPro BM negotiates cathode sales to Chinese battery firms in Europe

EcoPro BM entered talks on Oct. 26 to supply cathode active material from its Hungarian plant to Chinese battery makers, marking the first potential sales pact between a Korean cathode supplier and Chinese cell producers.

The discussions center on output from the company's factory in Debrecen, Hungary. The site has an initial capacity of 54,000 tonnes of cathode material each year, sufficient for 600,000 electric vehicles.

EcoPro BM spent 1.4 trillion won ($1.01 billion) to build the Hungarian complex. The facility entered commercial production in mid-2026 as the first European manufacturing footprint established by a South Korean cathode maker.

Negotiations cover roughly 20,000 tonnes of high-nickel cathode material annually, according to South Korean industry reports. That supply volume represents an estimated contract value of 2.4 trillion won ($1.73 billion) over three years.

The Hungarian plant operates three production lines about three kilometers from CATL's European battery hub. Contemporary Amperex Technology is building a 40-gigawatt-hour cell plant in Debrecen to supply Mercedes-Benz and BMW.

EVE Energy is also building a 28-gigawatt-hour cylindrical battery plant in the same industrial zone. Both Chinese manufacturers need local cathode active material — the chemical powder that stores energy — to meet European origin rules.

The European Union has tightened local content rules under the UK-EU Trade and Cooperation Agreement. The pact imposes origin thresholds of up to 65% on batteries and electric vehicles starting Jan. 1, 2027.

Vehicles failing to meet the regional threshold face a 10% customs tariff. Chinese battery makers in Europe face rising commercial pressure to replace imported Chinese cathode material with local European production.

European lawmakers are also drafting the Industrial Accelerator Act to enforce regional sourcing in public subsidies. The draft legislation penalizes battery modules assembled with active materials manufactured outside the European trade area.

For EcoPro BM, a contract would diversify its customer base beyond South Korean cell manufacturers. The Cheongju-based supplier has historically relied on Samsung SDI and SK On for almost all revenue.

Chinese cell makers dominate domestic production of lithium iron phosphate batteries, a cheaper chemistry that uses iron. However, their European factories focus heavily on nickel-rich chemistries to serve European premium carmakers.

EcoPro BM began spending 40 billion won ($29 million) in August to modify a Debrecen production line. The conversion allows the line to manufacture nickel-cobalt-manganese cathode material alongside existing nickel-cobalt-aluminum formulations.

The supplier has provided test samples from Debrecen to Chinese engineers for qualification. Early sample qualification is a mandatory engineering step that precedes any binding long-term volume agreement.

Negotiations between EcoPro BM and CATL began in September after preliminary contacts earlier this year. Company executives had signaled interest during earnings calls in supplying Chinese battery makers expanding across the continent.

EcoPro BM draws raw materials from group ventures, including the BNSI nickel smelter project in Indonesia. Integrated raw material procurement helps the supplier satisfy European traceability and environmental standards for battery chemical inputs.

The Debrecen site has room to double capacity to 108,000 tonnes a year. That expansion would produce enough cathode active material to support batteries for 1.35 million electric vehicles annually.

European rivals have struggled to scale regional cathode output. Belgium's Umicore postponed investments in European battery material capacity this year, leaving EcoPro BM with limited regional competition for merchant high-nickel supplies.

Chinese cathode makers such as Longbai Group have faced regulatory and construction delays on European projects. Those setbacks have widened a supply deficit for European cell makers requiring immediate localized inputs.

EcoPro BM has not filed a regulatory disclosure confirming the talks, and neither company has published contract terms or confirmed the identity of the counterparty.

The companies have not disclosed whether initial volumes will follow fixed-quantity commitments or fluctuating monthly offtake orders linked to prevailing lithium and nickel market prices.

Final supply agreements depend on technical qualification tests concluding before the European origin rules take effect on Jan. 1, 2027, with first commercial deliveries planned from late 2027.

EcoPro BM shares traded down 1.2% in Seoul on Oct. 27, while shares of parent company EcoPro closed unchanged following the initial reports of the discussions.