Revisiting Competitiveness in Europe's Electric Vehicle Battery Industry: Can a Resurgence Be Achieved?

In the quest for a greener future, the battery sector has emerged as a vital key to unlocking the decarbonisation of road transport. The European Policy Centre (EPC) recently published a policy paper, titled "The art of turning the corner - Towards a competitive comeback for European battery production," emphasising the importance of strengthening Europe's presence in this sector.

The paper, authored by Sandrine Dixson-Declève, highlights the critical role of batteries in enabling the replacement of internal combustion engines with electric motors, a necessary step for the green transition. Global battery production capacity reached 2.5 TWh in 2023, marking a 25% increase from the previous year. However, Europe risks falling behind in this race, as China outpaces it at every step of the battery production value chain, driving the majority of the global growth.

China's advantage lies in its ability to produce cheaper, mass-produced batteries and its control over critical raw materials. This dominance has been a challenge for Europe to regain competitiveness in battery production. The high cost of battery packs in vehicles is a significant factor that impacts overall vehicle affordability, making competitiveness in this sector crucial.

The policy paper proposes four priority actions to address this issue:

Establishing a European battery alliance to foster collaboration between industry, research institutions, and policymakers.
Developing a comprehensive battery strategy that includes incentives for battery recycling and the use of sustainable raw materials.
Investing in research and innovation to improve battery technology and reduce costs.
Implementing measures to ensure a level playing field for European battery manufacturers, such as trade defence instruments and regulatory support.

The policy paper is now available for consultation at this link: EPC Policy Paper.

Battery-electric vehicles (BEVs) are more energy-efficient than traditional vehicles, making them a key tool for reducing emissions. As the world moves towards a more sustainable future, it is essential that Europe takes urgent and coordinated action to boost its battery production capabilities and secure a competitive edge in this crucial sector.