A new assessment of European battery manufacturing capacity finds that the continent can produce adequate domestically-made cells to power electric vehicles eligible under the proposed Industrial Accelerator Act by 2030. The analysis challenges recent assertions from automakers that local content criteria set for battery components would be too demanding to meet.
The potential scale-up of EU battery production depends significantly on demand certainty, according to researchers. Implementing local content requirements for cells and cathode active materials could increase EU battery demand by an additional 34% compared to baseline projections for 2027. European policymakers view battery production as strategically important for maintaining industrial competitiveness and job creation, particularly as the automotive sector faces transition pressures.
The most critical vulnerability in Europe’s battery supply chain involves midstream components, specifically cathode active materials and their precursors. China currently controls approximately 90% of global production capacity for these materials, with even higher dominance in certain battery chemistries. European manufacturers have struggled to secure long-term purchase agreements needed to justify investments in these production facilities.
According to the analysis, achieving local content requirements for corporate vehicles is feasible under current capacity projections, though meeting demand from privately subsidized vehicles would require additional manufacturing capacity. Researchers recommend establishing minimum thresholds for domestically-sourced precursor materials as part of the Industrial Accelerator Act framework.
The EU’s commitment to local content rules faces an upcoming test when new provisions in the EU-UK Trade and Cooperation Agreement are scheduled to take effect in January. Industry representatives have requested delays in implementation, but policymakers emphasize that maintaining credibility of EU manufacturing standards is essential for building investor confidence in the European battery sector.
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