An analysis published by Transport & Environment, 2026, highlights the importance of “Made-in-EU” requirements in the European Union’s upcoming Industrial Accelerator Act. The report argues that public funding linked to local content rules is crucial for scaling up Europe’s battery industry, narrowing the current cost advantage held by Asian producers and strengthening supply-chain resilience.
The study draws on cost projections from the International Energy Agency and BloombergNEF to compare battery production costs in Europe, the United States and China. It finds that European battery cells currently cost about 17% more than U.S.-made cells and roughly 90% more than Chinese cells. However, this gap is largely attributed to limited economies of scale rather than inherent inefficiencies. According to the analysis, targeted policies could drive down European cell costs by nearly one-third by 2030, reducing the difference to around $14 per kilowatt-hour for both nickel-manganese-cobalt and lithium-iron-phosphate chemistries.
Key findings include:
- Europe already contributes between 45% and 70% of the value in a typical electric vehicle’s supply chain, mostly from components other than the battery itself.
- Batteries represent 83% to 86% of EV production costs for European carmakers. Onshoring battery manufacture would account for over 90% of any cost increase tied to local production.
- Scale-driven improvements—such as reduced scrap rates, higher labor proficiency, and greater automation—could substantially close the cost gap without permanent subsidies or tariffs.
The report estimates that by 2030, local battery production could add about €500 to the average EV price (ranging from €300 to €750 per vehicle), a figure that might be partially offset by public incentives. This incremental expense is presented as a sovereignty premium—an insurance policy against geopolitical disruptions and trade weaponization of critical battery materials.
Transport & Environment recommends applying Union Content criteria selectively to sectors at risk of supply-chain leverage and integrating these requirements into all relevant public incentive schemes. By doing so, the EU could secure a resilient, competitive battery industry while safeguarding economic and strategic interests.
Source: Transport & Environment
