A recent Deloitte analysis highlights the growing reliance of Europe’s automotive industry on Asian battery producers and the substantial revenue at stake for European companies. Last year, 77 percent of electric vehicle battery cells were manufactured in Asia, up from 70 percent in 2024, while Europe’s share remained at 13 percent. Additionally, 98 percent of Europe’s battery production capacity is controlled by Asian firms. Global battery cell production capacity climbed 26 percent over the past year to reach 920 gigawatt-hours (GWh).
Demand for batteries in Europe is projected to rise sharply, with nearly 28 million electric vehicles expected to roll off European assembly lines by 2030. These vehicles will require approximately 1,950 GWh of battery capacity. Without local cell manufacturing, European battery companies stand to forfeit an estimated €10.5 billion in profits over the next four years. When factoring in imported precursor materials, production equipment, and specialized personnel sourced from Asia, the potential lost value could total between €100 billion and €150 billion by 2030.
Deloitte’s study surveyed 222 decision-makers across 13 European countries and examined production data from about 350 European firms. It finds that most battery value is generated during raw material extraction and refining (50–60 percent) and cell assembly (15–30 percent). Yet 83 percent of respondents identified production of cell components as a primary challenge, and 82 percent cited raw material extraction and processing.
Supply chain constraints are another major hurdle: 57 percent of companies pointed to precursor material shortages, 51 percent cited difficulties commissioning new plants, and 48 percent noted a lack of experience. Forty-one percent expressed concern that Europe may not meet its own battery needs in the future.
“Batteries determine an electric vehicle’s range, performance, and cost,” says Harald Proff, head of Deloitte’s global automotive sector. “If European manufacturers aren’t competitive in this area, sales will come under increased pressure. Industry and policymakers must work together now to reduce dependency, particularly on China.”
Only 40 percent of projects along the battery value chain have been executed as planned in the past three years, and 80 percent of respondents reported that current regulations negatively impact initiatives. Companies say accelerated permitting processes (70 percent), stable demand signals (54 percent), and a clear clean-tech roadmap (51 percent) would support more successful project delivery.
Source: Deloitte
