But even Northvolt is not immune to current market conditions. The company said last month that it may delay its battery planned factory in northern Germany, citing a sharp rise in energy prices as part of the reason for the possible delay.

The company said in March that it had signed a memorandum of understanding with Schleswig-Holstein state and the Heide region for the development of the factory, and that it expected it to produce its first batteries in late 2025.

French battery startup Verkor announced last week that it had raised 250 million euros ($249 million) to fund a megafactory.

CEO Benoit Lemaignan described it as a "baby step," before the company embarks on raising funds for a 1.6 billion euro 16 GWh gigafactory that should open in 2025 and will supply Renault.

The European Union, which launched the European Battery Alliance in 2017 to kick-start a homegrown industry, wants companies in the region to provide 90 percent of the batteries needed by 2030 to power the energy transition on the continent.

When it comes to electric vehicle batteries, Benchmark Mineral Intelligence (BMI) estimates that Europe should have a manufacturing capacity of 1,200 GWh by 2031 if current plans come to fruition, outstripping expected demand of 875 GWh.

But of that 1,200 GWh, 44 percent will be provided by Asian companies with factories in Europe, ahead of homegrown firms on 43 percent and Tesla with 13 percent, according to a Reuters calculation based on BMI data.

What is more, Caspar Rawles, BMI chief data officer, said some of the plants being planned by European companies "will not ever make it off the drawing board."

At the same time, the Chinese, South Korean and Japanese companies that dominate the market are more likely to follow through because they already have contracts with global automakers and experience building gigafactories around the world, he said.

"The vast majority of European capacity is going to be Asian," Rawles said.

European automakers BMW, Mercedes-Benz, Stellantis and VW have all signed offtake agreements from plants under construction by Asian players, such as China's CATL and South Korea's LG Energy Solution.

And China's Envision AESC, for example, is already considering building more plants in Europe.

The European Battery Alliance (EBA) acknowledges Asian companies, and Chinese companies in particular, are likely to increase their market share in the coming years, helped by their track record and offtake agreements.

"The European Commission and the member states should be aware that if we want to have at least some resilience, knowledge and know-how in battery production, you need to have some domestic supply," said EBA policy manager Ilka von Dalwigk.

"Even if we have the production in Europe, it does not mean we have the know-how or the control," she said. "For the moment we see Northvolt -- but as for the other initiatives, there is still a long and winding road to go."

Besides Northvolt, which delivered its first lithium ion batteries from its Swedish gigafactory this year, another homegrown company is Automotive Cells Company (ACC), a venture between French energy giant TotalEnergies, Stellantis and Mercedes-Benz.

ACC is aiming for a capacity of 120 GWh by 2030, requiring 7 billion euros in equity, debt and subsidies, but its first gigafactory in northern France is still under construction.

Italvolt is aiming to build a 3.5-billion-euro gigafactory in northern Italy. It has not announced any fundraising plans yet but told Reuters that a joint venture would get the plant off the ground, promising further details soon.

Other startups taking the slower route to gigafactories include Slovakia's InoBat.

It will open a 45 megawatt-hour (MWh) pilot line in Bratislava early next year to produce high-performance batteries for customers to test and has signed agreements, including with German air taxi developer Lilium, worth 500 million euros by 2030, CEO Marian Bocek said.

He said InoBat had a pipeline of potential agreements worth 25 billion euros and aims to build production capacity in 4 GWh increments starting in 2025 - costing up to 400 million euros each - as contracts are signed.

"You do not have to raise billions of dollars, you basically raise money for the offtakes you sign on the back of bankable customers," Bocek said.

German startup Theion is developing lithium sulphur batteries and CEO Ulrich Ehmes said the startup aims to raise 50 million euros for a small plant to build samples for automotive and aerospace companies - and then seek funds for a first gigafactory of up to 20 GWh.

Another startup with a gigafactory in its sights is Britain's Ilika, which makes small solid-state batteries for "electroceuticals", or medical implants, for the U.S. market at a small plant in Romsey in southern England.

CEO Graeme Purdy said Ilika would seek a joint venture with a U.S. manufacturer for mass production of the small cells and will take the same approach for its EV battery project "Goliath."

The startup will build a megafactory, likely in partnership with an automaker, then seek a joint venture or license the technology to a battery maker to make at a gigafactory, rather than try to raise billions itself.

"It's a big ask," Purdy said. "Rather than trying to reinvent wheels on our way to doing that, we would rather work with an organization that has done it previously."

British sodium ion battery startup Faradion, meanwhile, has chosen a different route, selling out to Indian conglomerate Reliance Industries last year for an enterprise value of 100 million pounds. Reliance is aiming to build a 50 GWh plant in India.

"When you have a new chemistry like this, you need a champion behind it," Faradion CEO James Quinn said.

The EU has approved 6.1 billion euros since 2019 in funding by member states for battery research and innovation while Britain has a 1-billion-pound fund to support investments in EV supply chains. Some are looking for more help from politicians.

InoBat's Bocek said he was lobbying Brussels to favor EV batteries developed and designed by European companies - using local raw materials wherever possible - similar to the approach adopted by the United States to encourage domestic production with its Inflation Reduction Act.

"We cannot compete with the Chinese on cost," said Bocek. "But we can compete when it comes to a localized value chain."