T&E Analysis Finds Europe Can Meet 2030 Battery Cell Demand if Projects Materialize
New analysis contradicts auto industry claims that local content rules for the Industrial Accelerator Act are too ambitious.
A new analysis by Transport & Environment (T&E) indicates that Europe will have sufficient Made-in-EU battery cells available by 2030 to meet demand from vehicles covered under the upcoming Industrial Accelerator Act (IAA). This finding directly challenges recent assertions from the automotive sector that local content requirements for the Act are overly ambitious.
What Happened
T&E’s feasibility study on cell and cathode requirements concludes that the EU can produce enough cells to power all manufactured battery electric vehicles (BEVs) falling within the IAA scope, which includes corporate and private EVs receiving public subsidies or tax benefits. This projection relies on the condition that all planned production projects, including those rated with medium confidence, actually materialize. The analysis highlights that while cell production capacity appears adequate for the specified scope, the bottleneck lies in midstream components, specifically cathode active materials (CAM) and their precursors (pCAM). Currently, China controls up to 90% of global pCAM and CAM production capacity, and up to 95% for Lithium Iron Phosphate (LFP) chemistries. To address this, T&E recommends adding a minimum Made-in-EU threshold for pCAM sourced from trusted partners, identifying it as the most vulnerable segment of Europe’s value chain.
Why It Matters
The findings are significant as negotiations on the Industrial Accelerator Act reach a critical stage, with the Act poised to shape the future of European industrial competitiveness. T&E argues that scaling the EU battery sector is highly sensitive to demand certainty, and immediate targeted support is necessary to compete with Chinese battery imports that currently face virtually no tariffs. Implementing local content requirements for cells and cathode active materials could increase EU battery demand by an additional 34% compared to the current baseline in 2027. Xavier Sol, Director of Sustainable Investments and Batteries at T&E, stated that a strong local battery value chain is essential for strategic independence and safeguarding employment during a vulnerable period for the EU automotive sector. The analysis suggests that without smart demand-side rules, Europe risks losing ground in the clean tech race, as the competition from Asia is too large for a local value chain to build itself organically.
The Bottom Line
While the EU possesses the projected capacity to meet cell demand for IAA-eligible vehicles by 2030, securing the midstream supply chain for cathode materials remains a critical challenge. The implementation of the IAA and its local content rules will serve as a credibility test for Europe’s 'Made in Europe' agenda, particularly as carmakers continue to lobby for potential delays in related trade agreements.
