IBU-tec advanced materials is progressing construction of a 15,000-tonne-per-year lithium iron phosphate cathode-material plant at Bitterfeld-Wolfen in Germany, with production scheduled to begin during 2028.
The project is being developed under agreements with Volkswagen Group battery company PowerCo, which has contractually secured the full planned production volume for at least ten years. IBU-tec says construction remains on schedule, with detailed engineering and logistics infrastructure progressing and trial operation of the site’s new spray tower expected during the fourth quarter of 2026.
The spray tower is a central part of the production route. Spray drying converts a liquid feed into a controlled powder by atomising it into a heated gas stream, allowing manufacturers to influence characteristics such as particle size and morphology before subsequent thermal treatment.
For cathode-active materials, those characteristics have a direct influence on later processing and battery performance. Industrialising the chemistry therefore requires consistent control of raw materials, drying conditions, thermal treatment, contamination, laboratory analysis, and powder handling across much larger production volumes than are required during development work.
The Bitterfeld-Wolfen project is intended to lift IBU-tec’s LFP capacity by approximately five times. Its logistics build includes a new hall with storage for about 1,800 pallets, while laboratory capabilities and IT systems are also being expanded as the company prepares the site for significantly higher throughput.
Those less visible investments are as important as the main process equipment. A battery-material plant has to receive raw materials, sample and release incoming batches, control work-in-progress, maintain traceability, package finished powder, and provide customers with quality data across every production lot.
Lithium iron phosphate has gained a larger role in electric vehicles and stationary storage because it avoids nickel and cobalt while offering good thermal stability and long cycle life. Its lower energy density than some nickel-rich cathode chemistries remains a constraint where maximum range or minimum weight dominates the design, but falling cell costs and improving pack engineering have widened the applications in which LFP is commercially attractive.
Europe’s industrial challenge extends beyond building battery-cell factories. Cathode material, anode material, lithium chemicals, graphite, separators, electrolytes, and other inputs can remain dependent on imported supply even where the final cell is produced locally. The result is a battery plant that may be European by location without being European through much of its upstream value chain.
IBU-tec is positioning Bitterfeld-Wolfen as part of an alternative supply base for cathode material. The company says its proprietary process has been developed without relying on Chinese production technology and has been designed for European manufacturing conditions.
It also claims substantially lower process energy consumption than conventional Chinese production routes. That remains a company comparison rather than an independently established industry benchmark, but energy consumption is commercially relevant because cathode manufacture includes repeated drying and thermal-processing steps.
The PowerCo agreements reduce another major risk facing materials projects: demand. Announced battery capacity has repeatedly exceeded actual production ramp-up in Europe, leaving upstream suppliers exposed where factories are delayed or utilisation remains low. A long-term customer commitment covering the planned output gives IBU-tec greater visibility than building the facility entirely against forecast market demand.
The arrangement does not eliminate execution risk. Material still has to meet customer specifications, process yields have to be maintained at scale, equipment has to commission reliably, and the plant has to reach the output assumptions underlying the investment case.
IBU-tec’s existing operations remain small relative to the capacity planned for 2028. The group employs around 230 people, and its current LFP production capacity is a fraction of the Bitterfeld-Wolfen target. Scaling by approximately five times therefore requires organisational growth alongside the physical plant.
The company’s first-half 2026 figures underline that transition. Revenue reached €19.7 million, compared with €18.9 million a year earlier, while EBITDA stood at €2 million. Cash had risen to €9.7 million at the end of June, supported by milestone payments associated with the battery-capacity programme.
Those payments help fund construction but are not themselves proof of future production performance. IBU-tec’s larger commercial step comes in 2028, when the new line is expected to move from commissioning into sustained material supply under the PowerCo agreement.
Before then, the spray tower provides an earlier industrial milestone. Trial operation scheduled for the final quarter of 2026 will allow the company to begin proving equipment behaviour, process control, and material consistency before the complete plant reaches its intended scale.
Europe has accumulated no shortage of battery-factory announcements. Bitterfeld-Wolfen is now entering the phase in which announcements become process equipment, laboratories, logistics systems, and qualification work — the parts of industrialisation that determine whether 15,000 tonnes of nominal capacity ever becomes 15,000 tonnes of saleable cathode material.
