Batteries are critical to mitigate global warming, with battery electric vehicles as the backbone of low-carbon transport and the main driver of advances and demand for battery technology. However, the future demand and production of batteries remain uncertain, while the ambition to strengthen national capabilities and self-sufficiency is gaining momentum.
Reseachers by Germany's Fraunhofer Institute now published a study that assessed Europe’s capability to meet its future demand for high-energy batteries via domestic cell production. They found that demand in Europe is likely to exceed 1.0 TWh yr−1 by 2030 and thereby outpace domestic production, with production required to grow at highly ambitious growth rates of 31–68% yr−1. European production is very likely to cover at least 50–60% of the domestic demand by 2030, while 90% self-sufficiency seems feasible but far from certain.
To support Europe’s battery prospects, stakeholders must accelerate the materialization of production capacities and reckon with demand growth post-2030, with reliable industrial policies supporting Europe’s competitiveness, the study says.
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If lower production capacity materializes and domestic production remains limited, it will likely pose high economic risks for Europe and imply less European battery sovereignty and setbacks for rapid climate change mitigation, according to the study.
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Beyond mere domestic production capacity and self-sufficiency, the company’s origin is relevant in the context of accessibility and technology sovereignty. While the corporate landscape was nearly 100% Asian in the early 2020s, the share of European companies is projected to increase substantially. In 2025, around two-thirds of the materialized production capacity is likely to result from Asian-affiliated companies and more than one-third from European companies (Extended Data Fig. 2). By 2030, European companies are projected to hold the largest share (45–55%), while the share of Asian companies is expected to decline (40–50%) with US companies anticipated to capture modest shares (3–8%).
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Expressing the European battery demand in terms of required raw material quantities reveals that the cumulative demand for key materials, namely, nickel, cobalt, graphite, lithium and manganese, is projected to increase substantially by 2035, with expected 9-fold (cobalt) and 12–15-fold (nickel, manganese, graphite and lithium) increases relative to the quantities required in 2025 [...]
While Europe will rely on raw material imports until 2030–2035, three factors indicate a strengthening position as the study says:
- First, and in relation to expected demand, substantial domestic reserves of manganese and natural graphite are available, with possibly lower prospects for lithium and nickel, but primary cobalt is scarce.
- Second, existing self-sufficiency assessments [...] indicate progress in building European value chains, however, ramp-ups must be extremely quick. While cobalt and nickel imports (all grades) are likely to remain necessary for domestic processing, it is likely that major shares of lithium and most of the manganese can be sourced and refined domestically. Natural graphite (all grades) is likely to require both local sourcing and refining as well as imports. However, global supply diversification is anticipated to also lower general dependency risks36,37.
- Third, emphasizing the circular economy and recycling, as proposed in the EU’s Critical Raw Materials Act38 or incentivized by the US Inflation Reduction Act35, is likely to reduce dependency and further improve sustainability within a comprehensive battery ecosystem, also securing material availability even beyond 2050.
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