Europe seeks to revive its battery industry amid Chinese dominance

European officials say the continent’s emerging battery sector is gaining momentum, yet it still trails the production capacity of Chinese manufacturers that dominate the global market. In the past year, the European Union has approved more than €30 billion in subsidies for battery plants, with projects such as Sweden’s Northvolt, Germany’s Gigafactory, and France’s Saft expansion slated to add several hundred gigawatt‑hours of capacity by 2027. The EU’s “Fit for 55” climate package also includes a mandate that at least 40 % of electric‑vehicle batteries sold in Europe be sourced from within the bloc by 2030, a move intended to spur domestic supply chains and reduce reliance on imports.

Industry data shows that China currently controls roughly 70 % of global lithium‑ion battery production, benefitting from vertically integrated supply chains, lower labor costs, and early government backing. European firms face challenges in securing raw materials such as lithium, nickel and cobalt, which are largely mined in Africa and South America and processed in Asia. To address these gaps, the EU has launched the European Battery Alliance and signed agreements with mining companies to develop sustainable extraction projects, while also investing in recycling technologies to reclaim critical metals. Despite the influx of capital, analysts note that European plants must achieve economies of scale and improve manufacturing yields to compete on price and volume with Chinese rivals.

The coming years will test whether Europe can close the gap. If the newly funded factories reach full operational capacity and the bloc successfully secures a stable supply of raw materials, European battery output could rise to over 500 GWh by 2030, narrowing the disparity with China. However, the sector’s growth remains contingent on coordinated policy support, technological advances, and the ability to meet cost targets set by automakers, factors that will determine if Europe can reclaim a significant share of the global battery market.