GERA – A high-profile industrial project in the East German state of Thuringia has failed: South Korean investor SungEel has unexpectedly withdrawn from the region, halting plans to build a state-of-the-art battery recycling facility in Gera. The last-minute decision marks the definitive end of the multi-million-euro venture, which was considered a key component in the transformation of the automotive industry in central Germany.

Years of Site Searching End in Withdrawal

Planning for the recycling facility had been underway for several years. However, the search for a suitable location proved difficult, as many municipalities opposed the project—despite the prospect of 100 new jobs. Eventually, Gera was selected, but now comes the major setback: SungEel is completely abandoning the project.

“Due to the current global economic situation, we have decided not to pursue the planned project in Gera,” a company spokesperson announced. As a result, the investor is not only leaving Gera but withdrawing from Thuringia entirely.

Economic Uncertainty and Slow Approvals as Key Reasons

According to SungEel, several factors contributed to the decision:

• Falling Raw Material Prices: The prices of nickel, cobalt, and lithium—essential components of electric vehicle batteries—have sharply declined in recent months. This has temporarily reduced the economic viability of battery recycling.
• Declining Demand for EVs: The global market for electric vehicles is growing more slowly than anticipated, leading to a decreased need for recycled battery materials.
• Slow Approval Processes: The recycling plant could not have started operations before 2027—too late for the fast-moving market, according to SungEel. Delays in environmental and construction permits further influenced the decision.

Thuringian Automotive Industry Alarmed: “A Dire Signal for Investors”

The Thuringian automotive sector has reacted with concern. Rico Chmelik, Managing Director of the Thuringian Automotive Association, warned of the consequences: “How is the transformation of the automotive industry in Thuringia supposed to succeed if such future-oriented projects are blocked?”

SungEel’s withdrawal represents a major setback for structural change and sends a dire message to international investors. Regional policymakers are also expressing concern: Thuringia aims to establish itself as a hub for sustainable industries, but losing a flagship project like this could deter other companies from investing.

Uncertain Future for Battery Industry in Thuringia

With the collapse of the SungEel project, Thuringia now faces the challenge of attracting alternative investors for the future market of battery recycling and production. While other European locations such as Poland and Hungary are aggressively offering incentives for recycling plants, Thuringia risks falling behind in the electric mobility industry.

Whether new investors will step in to fill the gap in Gera remains unclear. What is certain, however, is that SungEel’s decision will have long-term economic consequences for the region. (zai)