Study calls on Europe to be bolder in battery production

05.09.2025

Source: E & M powernews

Europe can regain relevant market shares in battery production by setting the political course and making bold investments. This is the key finding of a study.

Dependence on Chinese battery technology is the Achilles heel of the European automotive industry in its efforts to maintain its market position in the course of the powertrain revolution. A study by Munich-based consulting firm Deloitte takes a survey of battery production as an opportunity to derive possible scenarios and their consequences.

Deloitte leaves no doubt that Europe should not leave the field of battery production to the competition from Asia. Otherwise, the automotive industry would reveal a "long-term strategic weakness" in the battery as the "most important and most expensive component" of electric vehicles. This manifests itself in the lack of influence on pricing and the risk of interrupted supply chains.

The study is a warning to car manufacturers and suppliers to break with the passive role of battery buyers. Deloitte backs this up with market data, strategic models and guest contributions from experts. The study also mentions technological areas in which Europe could become a leader. It goes on to say that only decisive action can lead to a resilient and scalable battery ecosystem.

A look at the three scenarios developed shows that this is urgently needed. In the first scenario, Europe remains on a "passive course" and does not take any coordinated measures. This is tantamount to only sporadic investments in battery technology, with projects delayed or canceled altogether. As a result, domestic production is stagnating and dependence on foreign supply chains and vulnerability to geopolitical disruptions remain.

Path to strategic sovereignty

The "Limited progress" scenario sees Europe playing a somewhat more active role, characterized by selective investments, joint ventures and public-private partnerships. As a result, some production capacities would be created. The analysts paint a picture of Europe receiving a moderate share of global battery production. However, the partial dependence on technology and materials from abroad will not change. Europe's strategic control is limited.

Deloitte calls the most favorable scenario for the automotive industry's value chain "strategic sovereignty". Here, two levels intertwine: a coordinated industrial policy and large-scale investments by industry. These ensure a leading role in next-generation battery technologies and thus a strong market position. The inner-European ecosystem is robust because it is characterized by secure access to raw materials, an advanced recycling infrastructure and technological innovations.

If Europe follows this path, it could achieve a market share of over 40 percent of global battery production by 2028. In the other two scenarios, Deloitte calculates a share of less than a quarter and a maximum of 35 percent respectively.

Deloitte emphasizes that the path to sovereignty is "within reach" with the support of the European Union's Clean Industrial Plan, "but time is of the essence". According to the consulting firm, the study outlines a clear and actionable roadmap to lead Europe away from dependence on batteries and dictated prices and to become a "strategic global player".

Author: Volker Stephan