Market Policy and Regulatory Constraints
The European Chemicals Agency classifies lithium carbonate, lithium chloride, and lithium hydroxide as hazardous substances, materials that are crucial raw materials for lithium batteries. Furthermore, Europe imposes stringent regulations on the transport of lithium batteries, requiring those exceeding 20Wh capacity to be treated as dangerous goods. This has led to restrictions on battery capacity in consumer electronics such as mobile phones (e.g., the battery capacity of the European version of the vivo X300 was reduced from 6040mAh to 5360mAh).
Supply Chain and Raw Material Dependency
Europe's battery industry heavily relies on imported raw materials, with EU and UK electric vehicle manufacturers sourcing only 16% of the lithium, cobalt, and nickel required to meet 2030 targets. The EU is entirely dependent on imports of processed lithium from nations such as Chile, the United States, and China, highlighting significant weaknesses in raw material supply.
Industrial Competition and Investment Outflow
The US Inflation Reduction Act offers higher subsidies, driving European battery companies to relocate. Europe's share of global lithium-ion battery investment plummeted from 41% in 2021 to 2% in 2022, with firms like Northvolt planning expansions in the US.
Corporate Operational Challenges
European battery firms grapple with order losses and sluggish capacity ramp-up. For instance, Northvolt sought bankruptcy protection due to substantial losses and debt issues, while Germany's BMZ filed for insolvency after major client order cancellations triggered cash flow disruption.
Development Goals Face Challenges
Despite the EU setting 2030 targets for battery self-sufficiency (such as sourcing 40% of critical raw materials domestically), actual progress has fallen short of expectations. Over one-third of planned lithium-ion battery projects now face delays or cancellation risks.