Apple Moved Its Battery Orders to China. VARTA Is Closing a Factory Because of It.

Most supply chain teams tracking European battery manufacturing have focused on EV cells and gigafactories. The story that landed this week is smaller in scale and more instructive in what it reveals about how quickly a single customer decision can unwind an entire production site.

German battery manufacturer VARTA is closing a factory in the southern state of Bavaria due to the loss of a major customer, with 350 employees set to lose their jobs. A company spokesman said the customer, reportedly responsible for ensuring the site operated at almost 100% capacity, will no longer purchase button cells made at the site in Nördlingen. The Frankfurter Allgemeine Zeitung and the Augsburger Allgemeine newspapers reported that the customer in question is Apple, and that the company intends to source its new batteries from China in future. According to the FAZ, price was the decisive factor. 

Apple and VARTA have not commented publicly on the reports.

Why a single customer decision becomes a factory closure

The mechanics here matter. A site running at almost 100% capacity based on one customer's orders has no buffer when that customer leaves. There is no partial replacement or ramp-down that preserves a viable core. VARTA's CEO Michael Ostermann told Wirtschaftswoche that although the company secured new customers in recent months, the contracts are "nowhere near enough" to save the site in Nördlingen. 

That is the structural risk of single-customer dependency made visible. It is also not a new risk for VARTA. The company recently underwent a major restructuring to avoid insolvency after reporting losses of €64.5 million in 2024. The Nördlingen closure lands on top of an organisation already operating with very little margin for further disruption.

The China sourcing dimension

The reported reason Apple moved its orders is price. That decision reflects a broader dynamic that German and European manufacturers of precision components are navigating across multiple sectors simultaneously: Chinese producers have closed the quality gap in categories where European manufacturers once held a defensible premium, while maintaining a cost structure that European factories, with their higher labour costs and energy prices, cannot match without subsidy or volume that no longer exists.

For button cell batteries, which power hearing aids, medical devices, wearables, and consumer electronics, the supply chain shift from European to Asian production has been underway for years. The VARTA Nördlingen closure is the latest and most visible consequence of that shift reaching a tipping point at a specific site.

The exposure for European and Asian companies

For procurement teams sourcing precision battery components through European supply chains, the VARTA situation raises a straightforward question: which of your current suppliers operate with high single-customer dependency, and what does their order book look like if that customer reprices or reshores to Asia?

The Nördlingen closure will be followed by efforts to find "socially acceptable solutions" and transfer some employees to other VARTA sites. But the site itself, its tooling, its production knowledge, and its workforce represent capability that does not reconstitute easily once it is wound down.

The disruption does not arrive as a component shortage or a delivery failure. It arrives as a factory that was running at full capacity last quarter and will not exist by the end of the year, taking with it the supply security that procurement teams assumed was built into their approved vendor list.