RolandBergerBattery industry inEurope at a crossroadsNOVEMBER 2025AUTHORSBuilding a competitive local supplyWOLFGANG BERNHARTchain for sustainable growthSenior PartnerDENNIS GALLUSA local battery value chain is crucial for enhancing Europe's strategicPrincipalindependence,but the battery industry in Europe is under threatfrom low-cost,subsidized imports-jeopardizing its viability.ISKENDER DEMIRAlthough demand is projected to reach 1.5 TWh by 2035,structuralSenior Consultantcost disadvantages and regulatory uncertainty threaten to shiftvalue creation permanently to China.Batteries are a key differentiating technology for electric mobility,the energy transition and the electrification of the economy.A battery industry in Europe,coupled with the systematicdevelopment of European capabilities,is crucial to achievesovereignty and influence future technology development.Producing batteries in Europe,however,comes with significantly higher costs thanimporting them from China due to higher investment in factories and elevatedoperating expenses.New EU manufacturers face additional high ramp-up costs.while fragmented regulations and unclear policies create uncertainty.Decisiveintervention is needed to ensure that the region is not risking the chance to createhundreds of thousands of jobs and billions in economic value in one of the century'smost strategic industries.Current state of the battery industry in EuropeThe battery industry in Europe faces a fundamental test:whether it can translateprojected demand grow th into a competitive advantage,or whether production willremain concentrated in China and other non-European markets.Europe is expected to become one of the world's largest markets for lithium-ionbatteries,with demand projected to reach c.1.5 TWh and amarket volume ofEUR c.130-150 bn,by 2035,despite the recent slowdown in EV demand expectations.To meet the majority of demand with locally produced battery cells,a significantnumber of manufacturing facilities are already operational,representing aninstalled production capacity of c.200 GWh and having created c.80,000 direct andindirect jobs to date.Europe is expected to become one of the world's largestmarkets for lithium-ion batteriesExpected battery market demand and market volume[based on average battery system prices]Market demand-Europe [TWh]Market volume-Europe [EUR bn]1.5130-150050.985-95030.41035-4502203020352030RolandBergerNumerous projects across other stages of the battery value chain are either alreadyin operation,under construction,or planned for further expansion.Our analysisshows successfully addressing the challenges ahead could generate up to 310,000jobs and contribute EUR c.75 bn in value to Europe's economy by 2035.Despite this potential,the industry faces considerable challenges.Structural costeven for experienced players,and persistent market uncertainty-including slowerelectric vehicle demand and mixed political messaging on the trajectory towardszero emission-are pressuring the competitiveness and viability of Europeanproduction.