Europe's electric vehicle industry may be better prepared for domestic battery production than previously expected.

A new analysis by environmental organisation Transport & Environment (T&E) suggests that European factories could manufacture enough battery cells by 2030 to meet demand from electric vehicles covered by proposed EU support schemes.

The findings challenge concerns raised by automotive manufacturers, who argue that Europe's battery supply chain needs more time to develop. However, the outlook depends heavily on planned factories becoming operational and securing sufficient investment.

<h3>Can Europe Meet Its Battery Demand?</h3>

The European Union is considering new manufacturing requirements under its proposed Industrial Accelerator Act (IAA), introduced in March 2026.

The legislation aims to strengthen European industry by prioritising locally manufactured products in public procurement and certain financial support programmes.

According to T&E, European battery production could satisfy demand from subsidised company cars and a substantial proportion of supported private electric vehicles by 2027.

By 2030, domestic factories could supply enough cells for both categories, provided that projects considered moderately likely to proceed are completed.

These projections concern vehicles covered by the proposed measures rather than the entire European electric vehicle market.

<h3>Why Carmakers Are Concerned</h3>

The European Automobile Manufacturers' Association (ACEA) has expressed doubts about whether battery factories can expand quickly enough.

Developing a manufacturing facility can take almost a decade from the initial announcement to full production. Consequently, projects announced today might not reach their intended capacity until approximately 2035. ACEA therefore supports a gradual introduction of local manufacturing requirements.

Industry concerns are reinforced by recent setbacks. Around 25% of European battery cell capacity announced since 2022 has been cancelled or suspended.

Germany has experienced particularly significant disruption, with its projected battery production pipeline for 2035 falling by half.

<h3>Asian Companies Play A Major Role</h3>

Although battery production is expanding within Europe, much of the existing capacity belongs to overseas manufacturers.

According to T&E, non-European companies control more than 85% of operational battery cell production capacity, with South Korean manufacturers responsible for approximately 72%. Companies such as LG Energy Solution, SDI and SK On operate European production facilities.

Chinese manufacturer CATL also has a factory in Germany and has begun testing production at another facility in Hungary.

Under the proposed local content rules, manufacturing location matters more than company ownership.

This means batteries produced in EU factories by Asian manufacturers can qualify as locally manufactured products.

<h3>Battery Materials Remain A Challenge</h3>

Producing battery cells is only one part of developing a complete European supply chain.

Cathode active materials, essential components that influence battery performance, remain particularly difficult to source domestically.

Although European projects representing 529,000 tonnes of annual cathode material capacity have been announced for 2030, T&E estimates that only around 177,000 tonnes are likely to materialise after accounting for project uncertainty.

Production of precursor cathode materials faces similar difficulties.

These gaps suggest that Europe could expand battery assembly while continuing to depend heavily on imported components.

<h3>What Happens Next?</h3>

T&E supports maintaining European manufacturing requirements for battery cells and cathode materials, alongside introducing additional targets for precursor and anode materials from 2032.

The organisation argues that predictable demand could encourage investment, strengthen supply security and create manufacturing jobs. However, future production will depend on financing, factory construction and successful industrial expansion.

For Europe's automotive industry, the coming years will determine whether ambitious battery manufacturing plans become a reliable domestic supply network.