Europe’s battery industry has expanded at extraordinary speed, fuelled by policy certainty and the guarantee of rising demand, a new report claims.
Europe’s Battery Economy, a new report from New AutoMotive, finds that more than €82 billion has already been committed to gigafactories across the continent, with the EU27 delivering the bulk of this investment. These projects are set to build over 1.2 TWh of annual capacity by 2030, positioning Europe to meet its own needs and emerge as a global exporter.
But the report warns that the bedrock on which this progress is built is now at risk, with changes looming to the EU’s emissions standards for cars. These rules function as the investment contract between Europe and its battery industry, providing the long-term demand signal that mining, refining, gigafactories and recycling projects rely on.
Any move to weaken or dilute these standards would rupture that contract, undermining investor confidence at the moment Europe needs it most.
The report also finds that while Europe has built strong momentum, persistent weaknesses in the midstream, particularly in refining, precursor production and anode materials, leave the sector exposed. Without consistent demand policy, Europe risks locking in dependence on imported battery materials and forfeiting its chance to build a competitive, sovereign industrial base.
Ciara Cook, Research Manager at New AutoMotive, said:
“The CO2 standards are the contract that Europe signed with its own battery industry. They are the reason private capital has poured into gigafactories, cathode plants, and recycling projects. If Europe now tears up that contract, it will scare off investment, stall supply chain development, and hand the advantage to the US and China. Europe built this momentum – now it must protect it.”
Chris Heron, Secretary General of E-mobility Europe, said:
“We know the future of transport is electric. What isn’t settled is who will build it. Hesitation or mixed signals risk undermining the investment certainty battery makers, manufacturers and grids need to scale. The message for policymakers is simple: hold the line on ambition and give industry clarity.”
Dr Andy Palmer, CEO / Founder, Palmer Energy Technology Ltd, a stationary storage and BMS company, said:
“Europe can reach 1.2 terawatt-hours of battery capacity by 2030 and become a global battery superpower, but only if policy stays stable. This industry is built on long-term capital, and long-term capital needs certainty.
“CO2 standards are the only bankable guarantee investors have. Start wavering now, or introduce so-called ‘flexibility’, and you don’t de-risk the transition, you scare off capital, stall projects, and strand assets. A ‘Made in Europe’ battery supply chain depends on one thing above all else: clear, consistent policy.”
