The venture capital (VC) arm of Caterpillar has invested in ElevenEs, a startup building a gigawatt-hour-scale lithium iron phosphate (LFP) cell factory in Europe.
Serbia-headquartered manufacturer ElevenEs announced the first closing of a Series B funding round yesterday (16 February), led by Caterpillar VC and with participation from an affiliate of Hong Kong-based commodity trading house BST.
ElevenES makes battery cells for the battery energy storage system (BESS), heavy industrial equipment and commercial electric vehicle (EV) sectors, alongside containerised BESS solutions for utility-scale and commercial and industrial (C&I) applications.
While financial terms of the Series B were not disclosed, ElevenEs said the proceeds will go toward infrastructure and equipment required for the initial phases of its planned ‘Megafactory’ in Subotica, Serbia, which will have a 1GWh annual production capacity.
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Construction will begin this month, and the first battery cell deliveries are expected to begin next year, scaling ElevenEs’ proprietary LFP blade prismatic cell technology, aimed at sectors ranging from mining and construction equipment, to rail and maritime, battery EVs, buses, trucks and BESS.
The company said the 25,000-square-metre factory will feature ‘state-of-the-art’ automated production facilities, employing more than 350 people, more than triple its current headcount of 110.
ElevenEs claimed the Megafactory (a term also coined by Tesla to describe its Megapack BESS production sites) will enable lower-carbon footprint manufacturing, while its optimised design reduces waste and increases supply chain circularity.
Caterpillar continues push into energy storage space
For investor Caterpillar, it marks a continued push into the energy space for the multinational industrial equipment provider. The company may see investment in a battery maker as useful not only for electrifying its core offerings, such as mining equipment, but also in strengthening its increased market presence in the energy storage space.
This includes ongoing work in the off-grid segment, where batteries are increasingly complementing or replacing the role of diesel and other fuel-fired gensets, but also in the grid-scale and large C&I energy storage space.
For instance, in late January, Caterpillar announced a deal with data centre company American Intelligence & Power Corporation (AIP Corp) to provide 2GW of fast-response natural gas generators augmented with battery storage for AIP Corp’s Monarch Compute Campus in West Virginia, US.
Earlier this month, the company’s asset management platform, Caterpillar AMP, was used by Massachusetts municipal utility Danvers Electric to integrate a 4.99MW/15MWh BESS aimed at managing long-term electricity costs for the utility’s 30,000 residential and business customers.
Caterpillar has also invested in battery recycling, materials and energy storage system integration company Redwood Materials, joining a Series D for the startup led by former Tesla CTO JB Straubel in August last year.
ElevenEs CEO touts competitiveness, localised production plans
Meanwhile, for ElevenES, the new factory represents the scaling up of a technology piloted at Europe’s first-ever LFP production plant, which it opened in Serbia in 2023. ElevenEs was spun out of aluminium processing company AI Pack Group.
At the time of the pilot plant’s opening, ElevenEs said it aimed to reach 48GWh of production capacity across two gigafactories within five years.
CEO Nemanja Mikac, speaking with ESN Premium in May 2024, said the European industry needed to be more cost-competitive with China, which was supplying batteries into the market at low cost “in order to maintain its volumes.”
Mikac said European buyers may pay a premium for domestic cells, but not may not be prepared to swallow significant cost differences, noting that while European markets often talk about sustainability, they still ultimately buy based on price.
ElevenEs developed its IP and LFP manufacturing without licensing from a larger, more established firm. Although it sources most of its materials and components from China, CEO Mikac said in the 2024 interview that the company intends to “definitely” localise production by 2030, if not earlier.
Mikac took part in an Energy-Storage.news panel discussion, hosted with our colleagues at PV Tech, at Intersolar Europe 2025, at which the CEO said that the European industry must learn from fallen battery manufacturing startups such as Northvolt.
The factors that impacted Northvolt and ultimately led to its bankruptcy included scaling too quickly and ending up with high volumes of battery scrap in production, Mikac said.
“They [Northvolt] got too much money too fast. It wasn’t the only issue, and I’m not blaming anyone specifically. But there were sparks of this a few years ago. Sometimes the scrap was over 50%, which isn’t sustainable. They should have scaled down, preserved money, and learned it on a lower scale. They might have been two or three years later to market, but they would have a company and a product today.”
Mikac yesterday described the Series B as a “crucial moment for the European battery industry.”
“We look forward to developing advanced LFP solutions for various industrial applications, continue innovating on battery energy storage systems and support Caterpillar’s focus on energy solutions,” he said.
The Energy Storage Summit 2026, focused on the UK and European markets, will take place next week, 24-25 February at InterContinental London – The O2. Use the discount code ESN20 for a 20% discount, while ESN Premium users can get 30% off.
