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Reliable industrial policies required to support the ramp-up of European battery production

Europe’s demand for high-energy batteries is likely to surpass 1.0 TWh per year by 2030, and is expected to further outpace domestic production despite the latter’s ambitious growth. To strengthen Europe’s battery self-sufficiency and competitiveness, policy-makers must accelerate the expansion of production capacity and implement reliable industrial policies that account for sustained demand growth toward and beyond 2030.

Messages for policy

Focus on net materialized production capacities rather than mere corporate announcements to ensure realistic policy planning and avoid overestimations, while ensuring a minimal level of production by local companies utilizing domestic intellectual property.

Create predictable and reliable framework conditions for industry and end users to stimulate market demand and allow capacity announcements to materialize.

Strengthen public–private partnerships to de-risk investments and streamline European regulations to accelerate the scale-up of battery production and regional supply chains.

Create a competitive differentiation and level playing field via de-risking industrial policies, sustainability criteria, and local content requirements at the European level, and carefully balance trade policies to foster competitiveness with options for global collaboration and learning.

Ensure continuous policy support and cascade research and development policies with industrial policies in terms of timing and scope in accordance with the scale up of battery production and an evolving battery value chain.

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based on: Link, S. et al. Nat. Energy https://doi.org/10.1038/s41560-025-01722-y (2025).

The policy problem

The rapid diffusion of battery electric vehicles — in addition to the decarbonization of the energy sector — requires an increasing number of batteries. However, the EU’s goal to cover 90% of its battery demand from domestic production by 2030 is at risk, as projected demand will likely exceed 1.0 TWh per year and outpace production capacity despite highly ambitious growth rates. If Europe fails to scale up production, it may face severe economic and geopolitical risks, due to increased dependence on external suppliers, weakened industrial competitiveness and potential for delayed decarbonization. An urgent question is therefore whether Europe can realistically meet its future battery demand through domestic production, and what policy actions are needed to ensure success.

The findings

We find that European battery cell demand will likely surpass 1.0 TWh per year by 2030, whereas domestic production capacity is expected to fall short, creating a risk of supply constraints. Although Europe can be expected to meet at least 50–60% of its demand through domestic production by 2030, achieving the EU’s 90% self-sufficiency target is feasible but uncertain, as nearly half of our modelled scenarios fail to meet this target (Fig. 1). If Europe wants more independence from battery cell imports, our findings highlight the urgency of accelerating production capacity expansion, scaling up a battery supply chain, and implementing strong industrial policies to support competitiveness and supply sovereignty. Our approach is broadly applicable to regions aiming for battery self-sufficiency and should be examined with interacting factors such as policy support and supply chain resilience. However, our analysis does not account for disruptive market shifts, policy reversals, or unexpected technological breakthroughs, which could substantially alter production and demand trajectories.

Fig. 1: Evaluations of the feasibility space (N = 1,000).

figure 1

a, Probabilistic future trajectories of total battery demand (blue) and battery production capacity (red) in Europe. The solid line indicates the median scenario. b, Histogram of European self-sufficiency by 2030. c, Histogram of company affiliation by 2030. North America, orange; Europe, grey; Asia, blue. Figure adapted from Link, S. et al. Nat. Energy https://doi.org/10.1038/s41560-025-01722-y (2025) under a Creative Commons licence CC BY 4.0.

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The study

Our study uses probabilistic modelling to project future battery demand and domestic production in Europe and evaluates Europe’s pathway towards battery self-sufficiency via probabilistic statements. We independently model demand and supply using S-shaped diffusion curves based on historical data, actual announced production capacities, and practice-oriented findings about how these announced capacities materialize over time. Our approach accounts for uncertainties such as construction delays, utilization rates and evolving market conditions, and assesses corresponding raw material needs. This study is particularly relevant given Europe’s policy push toward climate neutrality and striving for resilient, sustainable battery value chains with domestic production and global competitiveness. By applying an established technology diffusion framework, we provide a robust, scenario-based outlook rather than relying on overly optimistic industry projections. Our method is suitable for evaluating long-term industrial transformation and supply chain resilience, making it applicable to other regions with similar ambitions.