Menon presents an analysis of the pressures facing the European battery cell manufacturing industry. We identify three main threats that jeopardize its viability and competitiveness:

Fierce Competition from China: China’s dominance in the battery market, supported by an efficient supply chain and decreasing manufacturing costs, poses a significant challenge to European producers.

Substantial U.S. Subsidies under the Inflation Reduction Act (IRA): Generous subsidies in the United States are attracting potential European investments across the Atlantic, leading to a reallocation of planned production capacities.

Decline in Electric Vehicle (EV) Growth: A noticeable slowdown in EV demand growth in Europe as of late, exacerbates uncertainties, impacting future growth expectations and, consequently, excepted battery demand.

This research note delves into these three threats and provides a concise overview of the global battery cell market. We analyze their impact on the European battery sector and explore potential strategic responses that the EU could adopt to mitigate these pressures.

Authored by Jonas Erraia.

Read the full report here.