Deloitte Study 77 Percent of Batteries for Electric Vehicles are Manufactured in Asia

While German car manufacturers are putting more and more electric vehicles on the road, the battery cells mainly come from Asia—specifically from CATL, BYD, Samsung, or LG Energy. A known problem that was intended to be countered with European production. However, Europe's dependency continues to grow, as Deloitte highlighted in its report "Battery Maturity Assessment."

The high-voltage battery is the heart of any electric vehicle, as it determines the value, range, and cost of the entire vehicle. It constitutes the largest part of the weight and a significant portion of the price. The fact that Europe has largely lost the commercial manufacturing of lithium-ion battery cells to Asia is not new. Europe, and Germany in particular, aim to counter this, as Dr. Rolf-Dieter Jungk, State Secretary at the Federal Ministry for Research, Technology, and Space, emphasized during the VDA Mobility Innovation Summit at the end of March in Berlin: "By 2035, we want to establish a competitive production. In our country, we have everything we need for this. Batteries are an important component of Germany's High-Tech Agenda. The High-Tech Agenda is clearly focused on value creation. It secures and creates value creation in Germany, and it is a participatory agenda: Alongside climate-neutral mobility and five other key technologies, roadmaps are being created—binding, transparent, for everyone, and with clearly defined roles. This way, smart ideas from research lead to competitive value creation and prosperity. And innovations reach the streets faster."

Unfortunately, dependency on Asian battery producers is increasing rather than decreasing. In 2025, 77 percent of battery cells for electric cars were manufactured in Asia, while Europe remained unchanged at 13 percent. For comparison: In 2024, only 70 percent of battery cells originated from Asia. Moreover, 98 percent of European production capacity is controlled by Asian companies. This also marks an increase compared to 2024, albeit by just 1 percent. Overall, global production capacity has risen by 26 percent within a year to 920 GWh.

Europe's Automotive Industry is Missing out on Billions in Profits

The demand for batteries for electric vehicles will continue to rise: Nearly 28 million electric vehicles will be produced in Europe by 2030, according to analyses by Deloitte. These will require batteries with a capacity of 1,950 GWh. Local battery companies stand to lose profits of 10.5 billion euros (approx. 12 billion USD) over the next four years if they do not produce these themselves. Including imported raw materials, production equipment, and specialists sent from Asia, on which the European battery industry relies, the lost value creation could total between 100 and 150 billion euros (approx. between 115 and 173 billion USD) by 2030.

This is shown by a recent study from Deloitte. Based on production analyses and a survey of 222 decision-makers in 13 European countries, the study examines the competitiveness of European companies along the battery value chain. Approximately 350 European industrial companies operate within this ecosystem.

Where are the Problems in the Value Creation Process?

The value creation of batteries primarily occurs in material extraction and processing—accounting for 50 to 60 percent of the value creation—as well as cell production, at approximately 15 to 30 percent. These significantly determine the profitability and stability of downstream processes. Yet, European battery companies are not yet sufficiently positioned in these areas: For 83 percent of the companies surveyed by Deloitte, the production of cell components represents a central challenge, followed by material extraction and processing at 82 percent.

As one of the biggest hurdles, 57 percent of respondents cited problems with the supply of precursor materials. In second place, 51 percent mentioned difficulties in commissioning the facilities, followed by a lack of experience (48 percent). Additionally, 41 percent see the risk that Europe may not be able to meet its own battery demand in the future.

Can European Companies Still Turn the Tide?

"Manufacturers are researching new battery technologies, but the problems lie in financing and industrialization," explains Harald Proff, Head of the Global Automotive Sector at Deloitte. "Investments and funding should cover not only the development phase but also the first capital-intensive years of operation. Battery production is a long-term bet that European companies can still win. For these investments, the industry needs long-term planning certainty and a clear commitment to electromobility. Europe can no longer afford to steer blindly when it comes to batteries."

The survey reveals that in the past three years, only 40 percent of projects along the battery value chain were fully implemented as planned. 80 percent of respondents say that current regulations have a negative impact on battery projects. What would be helpful, however, are accelerated approval processes (70 percent), stable demand (54 percent), and the consistent implementation of a Clean-Tech Roadmap (51 percent). (se)