As European automakers ramp up production of electric cars, a new company aims to supply them with batteries.

French startup Verkor plans to open a battery factory in its home country in 2023, with an initial annual production capacity of 16 gigawatt-hours, before expanding to 50 gigawatt-hours at a later date, according to Automotive News Europe.

Verkor, which has spent the past year in stealth mode, counts electrical equipment company Schneider Electric among its backers. In an interview with Reuters, CEO Benoit Lemaignan said Verkor would seek an additional 1.6 billion euros ($1.8 billion) next year from private equity firms. Verkor is counting on the European Union's green recovery plan to counteract any potential financial damage from the pandemic, he said.

Battery supply is currently dominated by Asian firms, but politics and an anticipated boom in EV production to meet stricter EU emissions standards has more European firms looking for a piece of the action.

In addition to the suppliers from other continents that have set up factories in the EU, two other companies are seeking to supply European automakers from within. Sweden's Northvolt has a deal to sell $2.3 billion of batteries to BMW beginning in 2024, while French oil company Total negotiated a deal to buy battery maker Saft in 2016.

BMW iNext Pilot Plant

German automakers have been looking to secure supply chains and make large-scale supply commitments, but because of pushback from the EU not all supply can come from companies with headquarters in Asia.

EV growth was especially strong in Germany last year—even stronger than projected, bucking an international downward trend.

German automakers are pushing for a buildup of all aspects of the EV supply chain in Europe, in an attempt to catch up with Tesla.

Recently several executives have acknowledged Tesla's lead—potentially to help push vast changes in their companies that are slow to change for a number of reasons.