Chinese lithium-ion anode producer halts $1.4 billion Swedish investment

Putailai New Energy Technology Co., Ltd. (PTL), a Shanghai-based producer of anode materials for lithium-ion batteries, has scrapped its plans to build a $1.4 billion integrated production facility in Sundsvall, Sweden. The decision comes after the Swedish Strategic Products Inspectorate imposed regulatory conditions deemed unacceptable by PTL.

The project, first announced in May 2023, was set to establish a 100,000-ton annual capacity anode materials plant through a newly formed subsidiary, Zichen Technology Sweden AB. The facility was intended to strengthen PTL’s position in the European battery supply chain, with the first phase targeting 50,000 tons of capacity by 2025.

PTL revealed in a December 19 statement that the Swedish government initiated a review under the country’s Foreign Direct Investment Act, which came into force in 2024. In early December, the Swedish authorities proposed conditions related to Zichen Sweden’s ownership, management structure, and intellectual property rights. PTL found these requirements commercially unfeasible and proposed alternative arrangements, but the government rejected them.

“These demands pose significant challenges from both a commercial and operational perspective,” PTL said in its statement. “We believe in open and mutually beneficial cooperation. Europe’s green energy transition needs a robust and diversified supply chain, and Chinese companies are crucial to this ecosystem.”

A PTL spokesperson voiced dissatisfaction with the Swedish stance, describing the control-related demands as “unreasonable” and contrary to global trade norms. The company is exploring legal avenues to appeal the decision and remains in communication with Swedish authorities to assess alternative pathways for this project.

The aborted investment marks a setback for PTL’s international expansion strategy. The company, which already operates 150,000 tons of anode capacity in mainland China, has another 100,000 tons under construction, expected to come online by 2025.

The Sundsvall project was viewed as a critical step in aligning PTL’s operations with Europe’s growing battery manufacturing sector. The integrated facility would have included anode material production, coating, and processing lines to meet rising demand from European electric vehicle manufacturers.

Despite this setback, PTL remains committed to its overseas ambitions. The company is reportedly evaluating alternative investment destinations to support its global growth strategy and mitigate risks from regulatory hurdles in individual markets.

Industry analysts suggest that the case highlights a growing tension between Europe’s desire to reduce reliance on Chinese supply chains and the practical need for Chinese expertise and capacity in the battery materials sector. PTL’s halted project underscores the challenges China investors face in navigating increasingly stringent national security and investment screening policies across Europe.