EU battery production can narrow cost gap with China by 2030
A T&E report shows the EU can reduce battery cost differences from 90% to 30% by 2030 through local scaling, cutting EV prices by €500. Learn how.
The European Union can significantly narrow the cost gap in batteries between European and Chinese production by accelerating the scaling of local capacity, according to a report from the transport and environmental organization T&E.
Analysts estimate the price difference could drop from the current 90% to around 30% by 2030. In monetary terms, this means reducing the gap to $14 per kWh, compared to a potential $41 without support measures. For an average electric vehicle, this translates to a price difference of about €500.
Cost reductions are achievable through improved production efficiency, automation, lower defect rates, and accumulated technological expertise. However, achieving this effect requires local content requirements and backing from the Made in Europe initiative.
The European Commission is preparing the Industrial Accelerator Act, which would prioritize European products when using public funds in strategic sectors, including batteries and electric vehicles.
In T&E's view, developing a domestic battery industry is not just about price; it's also a matter of industrial sovereignty amid risks of export restrictions from China.