A new report from transport and environment campaign group T&E, published Monday, argues that scaling up domestic production could slash the cost disadvantage of EU-made batteries against Chinese rivals from a staggering 90% to just 30%. The findings come just days before the European executive is expected to unveil its “Industrial Accelerator Act,” a plan designed to prioritize locally manufactured products in key strategic sectors when public funds are involved.
The upcoming legislation, set to be proposed on Wednesday, will target industries including batteries, solar and wind energy, hydrogen manufacturing, nuclear power, and electric vehicles. However, some automakers have pushed back, warning that local content requirements would make batteries prohibitively expensive and undermine the competitiveness of their models.
T&E’s report challenges that notion, suggesting that improved manufacturing efficiency—specifically lower scrap rates, advanced labor know-how, and automation—could narrow the cost gap to just $14 per kilowatt-hour by 2030, down from a potential $41. For the average electric vehicle, that would translate to a difference of roughly €500 ($590).
The group argues that this remaining gap could be offset by public incentives or viewed as an “insurance premium” against geopolitical risks, pointing to existing Chinese export restrictions on critical minerals and rare earths as a cautionary tale.
“Europe needs a domestic battery industry as an insurance policy against its supply chains being weaponized,” the report states. “Local content requirements are the only policy on the table to avoid another Northvolt. The cost of Made-in-EU rules is a sovereignty premium worth paying.”
T&E emphasizes that the cost gap will only narrow if EU local content rules enable companies like ACC, Powerco, and Verkor to successfully scale up production. To make that happen, the group urges that the “Made in Europe” plan explicitly include EV tax rebates for owners, as well as incentives for employers and employees participating in corporate car schemes.
The message to Brussels is clear: treating domestic manufacturing as a strategic asset may carry a price tag, but the cost of inaction could be far higher.
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