Last week, InnoEnergy and the European Battery Alliance represented the battery value chain in Brussels alongside portfolio companies Verkor (France) and Prime Batteries (Romania) to address critical challenges facing the automotive sector. Separate discussions took place with Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, on the role of the battery value chain, Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition and Maròš Šefčovič, European Commissioner for Trade and Economic Security.

The Strategic Dialogue series, launched by European Commission President Ursula von der Leyen earlier this year, aims to inform an action plan for the sector, expected on 5 March 2025. The plan will introduce key measures to sustain the automotive industry’s success as a major pillar of the European economy.

The European Battery Alliance highlighted the essential and interlinked roles of batteries and the automotive sector. The EU battery and car industries form a single, extended value chain, where a competitive and sustainable battery industry is crucial for Europe to remain a global automotive powerhouse. Automakers require a strong battery supply chain to mitigate supply and price risks, while the battery sector depends on a thriving car industry to drive the transition to electric mobility. Batteries account for 30 to 40 per cent of the price of an electric vehicle, underpinning their critical role in the industry’s zero-emission future.

The action plan, expected on 5 March 2025, must include support measures to help the battery industry to scale up and achieve mass industrial production. Without such support, the European automotive industry risks falling behind its global competitors.

Boosting demand for electric vehicles was also a central point of discussion. Stronger market signals are needed to increase adoption. One potential solution is an EU-wide EV purchase bonus, which could encourage consumers and businesses to make the switch in the short term.

Any such scheme should be conditioned on sustainability and progressive local content requirements to ensure that both EVs and batteries made in Europe receive priority. Buying European will maximise the socio-economic impact of the transition to low-emission vehicles and reinforce the resilience of domestic European battery and automotive industries.

The alliance outlined the significant challenges European cell manufacturers face in scaling up production and industrialising their processes, particularly in the face of fierce competition from lower-cost battery cells produced outside the EU. Support for cell manufacturers in the short term, particularly for their operational expenses (OPEX), would help bridge the competitiveness gap.

A structured support mechanism in the form of a fixed premium for a temporary period of five to eight years after operations commence could provide the stability needed for companies to ramp up and achieve full-scale production. A strong European base of cell makers will provide  diversification of supply is critical to ensuring long-term resilience in the sector and reducing dependency on external sources.

A comprehensive package of measures is urgently needed to keep Europe on track with both industrial and decarbonisation goals. Implementing emergency and structural measures will be key to securing competitiveness and ensuring a positive economic outlook for the European Union by 2030.

The window of opportunity is short, and there is no time to lose. Europe must maintain its ambition to transition to zero-emission vehicles and remain at the forefront of the global automotive industry.