Europe hasn’t launched a single €100 billion tech IPO since SAP. In the meantime, billion-dollar firms are rising within the U.S. and China at an growing price. For instance, Tesla reworked the U.S. automotive and vitality markets with electrical automobiles and battery tech, whereas China’s BYD has grown from battery maker to a world chief in EVs and renewables.
The issue in Europe isn’t a scarcity of expertise however quite the absence of efficient programs that allow innovation to scale. This systemic hole prevents promising startups from rising into trade giants. That’s very true in vitality tech, the place infrastructure, capital, and regulation should work in tandem. European startups typically battle with all three.
To grasp the scope of this problem, check out Europe’s IPO drought: SAP went public in 1972. Since then, no European tech firm has crossed the €100 billion valuation threshold. In that point, the startup ecosystem has matured, enterprise capital has grown, and governments have launched varied innovation applications. But the sort of industrial leverage seen within the U.S., via firms like Tesla, Nvidia, or Enphase, stays largely absent in Europe.
The basis trigger lies deeper: Europe has expertise, entrepreneurial drive, and cutting-edge know-how, however lacks a scalable system to show them into world champions.
Vitality Tech as a geopolitical industrial alternative
China is electrifying its economic system 9 instances sooner than the worldwide common. It’s not simply deploying photo voltaic and wind at a report tempo; it additionally dominates key applied sciences like batteries, storage programs, and grid infrastructure. The U.S., now once more the world’s largest oil producer, is paradoxically experiencing a renewable vitality increase, significantly in Republican-led states the place buyers are starting to view vitality tech as a brand new development engine.
Europe, in contrast, typically performs catch-up. However the fundamentals are sturdy: fossil gas imports are costly and geopolitically fragile. In 2024 alone, Germany spent over €64 billion on oil and fuel imports. In line with the suppose tank Ember, Europe saved $59 billion in fossil gas import prices over the previous 5 years thanks to scrub electrification. That’s capital urgently wanted for industrial renewal, grid upgrades, and strategic innovation.
And but: this stands in unusual distinction to present coverage. The brand new EU–U.S. commerce settlement features a promise from the European Fee to import $250 billion price of vitality from the U.S. yearly, greater than triple the 2024 determine of $75.9 billion. Vitality merchants and analysts throughout Europe contemplate this determine wildly unrealistic. Even when the EU imported all its fuel from the U.S., the quantity would barely attain $170 billion. However extra importantly: how does such a fossil-heavy promise align with Europe’s personal local weather targets and its strategic curiosity in vitality sovereignty?
Three structural levers Europe should pull
If Europe needs to guide in vitality tech, it wants deep reform at three ranges:
1. Mobilise institutional capital
EU frameworks like Solvency II and AIFMD presently discourage pension funds and insurers from collaborating in VC markets. But these long-term buyers could possibly be important in scaling vitality tech infrastructure. Devoted mandates for vitality tech, linked to tax incentives or public-private co-investments, might change the sport. France’s “Tibi” initiative, which channels pension fund capital into high-growth tech firms, provides a promising template.
2. Make public capital VC-compatible
Europe has sturdy public improvement banks, however weak operational buildings with regards to pace, threat, and entrepreneurial governance. Most public funding nonetheless follows conventional grant logic: heavy paperwork, restricted flexibility. What’s wanted are autonomous, VC-style items: small groups with clear mandates, agile governance, and accountability for outcomes. International locations like Israel or Canada present what’s doable.
3. Construct (don’t import) Vitality Tech champions
Europe can’t afford to be only a purchaser of American or Chinese language innovation. It should construct its personal champions. Which means utilizing public procurement to create early markets, supporting repeat founders, and funding vitality tech accelerators and scale-up automobiles. The U.S. is unlocking billions in native manufacturing by way of the Purchase American Act; Europe wants a comparable imaginative and prescient: Construct European. Not only for chips, however for batteries, warmth pumps, grid software program, and clear industrial programs.
Using the European electrical wave
Europe has no oil reserves, however it does have capital, technical know-how, and a powerful industrial base. It has no Trump, however it does have political stress for transformation and rising public help for a clear route. The foundations for vitality tech to develop into a defining European trade are in place. What’s lacking is political coordination and the need to show this into a real industrial technique.
The transformation to “Electrical Europe” isn’t a matter of local weather. It’s a matter of competitiveness. If we need to experience this wave, we have to act now, with capital, coordination, and a real industrial technique. And who is aware of: Europe’s subsequent SAP would possibly simply emerge from Berlin, Rotterdam, or Marseille.
