Core Insights - The article highlights a shift in battery demand from Europe to the U.S., indicating that the focus is moving from production capacity to deliverable capacity and contract locking [4][10]. Group 1: European Battery Market - Volkswagen Group has significantly reduced its budget for its battery subsidiary PowerCo, with funding plans dropping from an initial €15 billion to potentially single-digit billions, citing slower-than-expected market growth [5][6]. - The delay in battery localization in Europe is attributed to financial constraints and the lengthy process of securing grid access, which can take 2 to 10 years [8][9]. - The European Union is pushing for legislation to expedite grid project approvals, acknowledging that without faster grid investments, the electrification and AI expansion will struggle to translate into industrial demand [9]. Group 2: U.S. Battery Market - In contrast to Europe, U.S. battery demand is shifting towards energy storage systems (ESS), with Korean battery giants reallocating resources from electric vehicle (EV) production to ESS contracts [10][12]. - Samsung SDI announced a contract worth over 2 trillion KRW (approximately $1.36 billion) for LFP storage batteries, set to begin in 2027, indicating a strategic pivot towards ESS [10]. - SK On is refocusing its operations to prioritize energy storage, ending its joint venture with Ford and taking full control of its Tennessee plant [12]. Group 3: Implications for Supply Chains - The contrasting developments in Europe and the U.S. suggest different strategies for localization, with Europe leaning towards mergers and financing collaborations, while the U.S. is rapidly solidifying demand through ESS contracts and policy constraints [15].