Low-profile German battery maker Akasol has opened a new factory to boost production amid growing demand for commercial electric vehicles.

The company cut the ribbon on a €10 million (USD $12 million) factory in November, in preparation for growth that could take Akasol’s annual turnover from €15 million ($18 million) this year to €100 million ($119 million) by 2020.

With capacity for 600 megawatt-hours of lithium-ion battery production a year, the facility, located in central Germany, is the largest of its kind in Europe.

It is dedicated to producing Akasol’s Akasystem OEM lithium-manganese-cobalt-oxide battery product line, which ranges in energy storage capacity from 10 watts and 25 kilowatt-hours to 30 watts and 73.2 kilowatt-hours per unit.

“The plant can produce high-performance battery systems for up to 3,000 hybrid or electric vehicles or other large commercial vehicles each year,” said Akasol.

The opening follows two contracts from unspecified “leading bus manufacturers” to build around 10,000 buses “within the next few years," according to the company.

Akasol will release the names of the manufacturers in the new year, Managing Director Sven Schulz told GTM. “The demand for further capacity is coming from client contracts that we’re expecting soon,” he said.

“We’re currently in talks with several manufacturers to confirm the details and make public announcements in coming months.”

Akasol’s other clients include double-decker bus maker Alexander Dennis, train manufacturers Alstom and Bombardier, street-cleaning vehicle firm Bucher Municipal and coach-to-minibus company VDL Bus & Coach.

Schulz said analysts are expecting Akasol’s primary market, for hybrid and electric buses, to grow by up to 35 percent a year.

Elsewhere, the company is targeting other commercial and industrial vehicle segments. In June, it unveiled a partnership with ZEM, a Norwegian company specializing in battery systems for maritime applications.

The two companies have launched a self-contained, modular 24-kilowatt-hour battery unit for small passenger ferries and aquaculture and fishing boats.

Akasol also has a stationary storage range, branded Neeo, which scales up from a 6.5-kilowatt-hour residential offering, priced at €8,499 (USD $10,075) with a 10-year guarantee, to a commercial and industrial product, with up to 650 kilowatt-hours of storage, to a utility-scale system.

Although the company has limited its scope to European markets, Schulz said it is planning to develop production facilities elsewhere, with announcements due in 2018. American expansion is on the priority list.

Randy Moore, CEO of Missouri-based nickel-zinc battery maker ZAF Energy Systems, said the German company might encounter a somewhat different market landscape in the U.S.

“We think the fastest-growing segments in the United States are going to be the hybrid electric and stop-start markets,” he said. “We’re also bullish about industrial motive electrification here. Our view is that Europe will adopt full electric vehicles faster than we will in the States.”

Worldwide, demand for commercial electric vehicles is on the rise. In October, C40, a network of megacities committed to addressing climate change, issued a commitment to purchase only zero-emission buses from 2025 on.

A dozen mayors, including those of Paris, London and Los Angeles, signed up to the commitment.

In its Global EV Outlook 2017, the International Energy Agency noted that the global battery-powered electric bus stock grew to about 345,000 vehicles in 2016, double the number in 2015. Almost all of this growth so far has been in China, however.

The country had around 343,500 electric buses in 2016, compared to 1,273 in Europe and a mere 200 in the U.S.

However, said the IEA, “The European electric bus stock more than doubled from 2015, suggesting that the market is moving beyond the demonstration phase into commercial development." Paris alone is planning to introduce around 4,000 electric buses within the next eight years, it said.