mckinsey -全新时代 欧洲汽车行业行动计划 A new ERA An action plan for the European automotive industry

September2025

Mcsey

&company

Automotive&AssemblyPractice

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry

TheEuropeanautomotiveindustryfacesitsbiggesttransformation

yet.Theindustrymusttakeactiontoreestablishgloballeadershipandensuresuccessineconomics,resilience,anddecarbonization.

ThisarticleisacollaborativeeffortbyAndreasTschiesner,AndreasVenus,HaraldDeubener,PatrickSchaufuss,andRuthHeuss,withMiloBoers,representingviewsfromMcKinsey’sAutomotive&

AssemblyPractice.

TheEuropeanautomotiveindustryisabackboneoftheregion’seconomyandwelfare.Itcontributes7percentofGDPintheEuropeanUnion,accountsforabout€170billioninexports,andemploys

about13.8millionpeople,includingthrough3.5

milliondirectandindirectmanufacturingjobs—8.5percentoftheregion’stotalmanufacturingtalent

base.

1

Inaddition,theindustryisonatrajectory

towardzeroemissions.Atthesametime,new

developmentsinsoftware,genAI,connectivity,

andself-drivingtechnologyarereshapingwhattheindustrycanoffer.Togetherwithdecarbonization,thistechnologicaldisruptionrepresentsthelargesttransformationintheindustry’shistoryandcreatesopportunitiesforplayersacrossthevaluechain.

2

However,theEuropeanautomotiveindustryfaces

headwinds.Thetechnologicaldisruptionalsocreatesnewrequirements,andcombinedwithgrowing

internationalcompetition,geopoliticalissues,and

highfactorcosts,thishaschallengedtheindustry.

AccordingtoMcKinsey’srecentarticle“Europe’s

economicpotentialintheshifttoelectricvehicles,”themostdisruptivescenarioputs€440billioninGDP—

aboutone-thirdoftheindustry—atriskby2035.

3

Automotiveplayersandtheirsupplierecosystem,aswellasfinanciers,regulators,andadjacent

industries,needtocometogethertomake

structuralchangesandreestablishtheregion

asaleadingglobalautomotivepowerhouse.In

thisarticle,wediscussthechallengesfacing

theindustryandlayoutanine-pointactionplan

buildingonourpreviousMcKinseyreportAroad

mapforEurope’sautomotiveindustry.

4

Thisactionplanisbasedonthreekeydimensionsthatwill

buildastrongfoundationfortheindustry’sfuture:

successfuleconomics,successfulresilience,

andsuccessfuldecarbonization(abatementof

CO2),formingtheacronym“ERA.”Additionally,digitalizationandAIwillbecriticalasenablerstosucceedinthisnewera.

5

HeadwindsintheEuropeanautoindustry

AlthoughEuropehaslongmaintainedastrongglobalpositionintheautomotivesector,theindustrynow

facesaseriesofcomplexandevolvingchallenges.

—Technologicaldisruptionandtransitionpressures.Powertrainshifts,digitalization,andsoftware-

definedvehicles(SDVs)arereshapingtheindustryatafundamentallevel.McKinseyestimatesthat

85to90percentofthevalueaddedfromatypicalEuropeaninternalcombustionengine(ICE)vehiclecontributestotheEuropeaneconomy,dropping

to75percentforlocallyproducedbattery-

electricvehicles(BEVs)and15to20percent

forimportedBEVs.

6

ThetransitionfromICEto

electricdrivetrainsrequiresnotonlyretooling

productionbutalsoredefiningvaluechains

andcorecompetencies.Meanwhile,software

andelectronics—particularlyinareasinwhich

non-Europeanplayersarerapidlyadvancing,

suchasadvanceddriver-assistancesystems

(ADAS),vehicleconnectivity,andin-vehicleuserexperience—arebecomingkeydifferentiators.Asmoothdigitalcustomerexperiencehas

alsobecomeanonnegotiablefeaturefor

manycustomers.McKinseyresearchshows

advancementsindigitalizationandAIincreasinglypropelglobalmarketvaluations,withthetoptenEuropeanautomotivecompanies(passenger

carOEMsandsuppliers)seeinga€71billiondropinvaluationsince2015(a19percentreduction),comparedtoaquadruplingofUStechoverthe

sameperiod,basedontheNASDAQ100index.

—Intensifyingglobalcompetitionandemergingtechleaders.Europeanautomotiveincumbentshavelostaboutafifthoftheirglobalmarket

sharesince2017,

7

whilenewentrantshavedoubledtheirs.Asaresult,eachgroupnowholdsaboutaquarteroftheglobalmarket.Incumbentsfacemountingcompetition,

1“EUtradesince1988byHS2-4-6andCN8,”Eurostat,updatedAugust18,2025;“Automotiveindustry,”EuropeanCommission,accessedAugust29,2025.

2Formore,see“Europe’seconomicpotentialintheshifttoelectricvehicles,”McKinsey,October3,2024.

3“Europe’seconomicpotentialintheshifttoelectricvehicles,”McKinsey,October3,2024.ThescopeoftheseestimatesincludestheGDP

impactontheautomotivesector,updatinglastyear’sreportedGVAimpactbasedonlatestEuropeanCommissionestimatesfortheautomotiveindustry’sGDPcontribution.

4AndreasCornet,RuthHeuss,PatrickSchaufuss,andAndreasTschiesner,AroadmapforEurope’sautomotiveindustry,McKinsey,August2023.

5Formore,seeEuropeintheintelligentage:Fromideastoaction,WorldEconomicForumincollaborationwithMcKinsey,January2025.

6“Europe’seconomicpotentialintheshifttoelectricvehicles,”McKinsey,October3,2024.

7BasedondatafromEVVolumes,S&PLightVehicleSales,andtheMcKinseyCenterforFutureMobility.

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry2

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry3

particularlyfromdigitallynativenewentrants

intheelectricvehicle(EV)sector.Thesenew

playersoftenbenefitfromfasterdevelopment

cycles,verticallyintegratedmodels,andeven

scaleadvantages,enablingthemtodevelop

increasinglyadvancedvehicles—oftenatdoublethespeedandhalfthecost.WhileEuropean

brandsstillenjoyastrongreputation,the

centerofinnovationisshiftingglobally,withAsiaandNorthAmericaleadinginemergingtechnologies.

—Geopoliticalandeconomicheadwinds.High

energypricesandvolatility,particularly

followingrecentgeopoliticaltensions,hasmademanufacturinginEuropemorecostlyrelativetootherglobalregions;averageEuropeanenergycostsaredoublethoseoftheUnitedStatesandChina.

8

Thevolatilityofsupplychainsforcriticalrawmaterialssuchasrareearthelements

(REEs)threatenstheavailabilityofessential

inputsforEVmotorsandelectronics,because

morethan95percentofEUREEimportscomefromChina.

9

Batteriesinparticulararenow

treatedasstrategicassets,andChinacontrolledover80percentoftheglobalbatteryvalue

chainasof2023.

10

However,movementsto

localizesupplyhavefacedsetbacks,withrecentbankruptciesseeingnearlyhalfofannounced

capacityvanishintheshortterm.

—Structuralandregulatorychallengesinthe

Europeanoperatingenvironment.Restructuringandadaptationefforts,suchasadjusting

operatingfootprintsandlaborshifts,are

morecomplexinEuropethaninotherregions

becauseofaregulatorylandscapewithrigorouscompliancestandardsandapprovaltimelines.

Despitethechallengestheregionfaces,the

Europeanautomotiveindustrycanseizethe

momenttoregainitsglobalcompetitiveadvantageandsuccessfullytransitiontoitsnextphasethroughtargetedaction.

AnactionplanfortheEuropeanautomotiveindustry

Wehavedevelopedanactionplantoaddressthe

challengesthattheEuropeanautomotiveindustryisfacingandhelpacceleratethetransitiontowardasustainableandcompetitivefuture.Centraltothisvisionofanew“ERA”isabalancedfocusonthree

criticaldimensions:

—Successfuleconomics.Europeanautoplayers

canenablesustainableprofitstosecuretheautoecosystem,sustainjobs,andboostEurope’sGDP.

—Successfulresilience.Europeanautoplayerscanbuildresilientvaluechains,reduce

dependencyonotherregions,andmaintainEuropeasasupplychainpowerhouse.

—Successfuldecarbonization(“abatementofCO2”).TheEuropeanautomotiveindustrycan

achievenetzeroby2050throughzero-emissionpowertrainsandeffectivesectorcoupling.

ForEuropetoachieveasuccessfultransitionalong

eachofthesedimensions,itwillneedtoaddress

threecorepillars:transformingEuropeanautomotivecompanies,future-proofingthevaluechain,and

levelingtheplayingfieldtocompeteglobally(Exhibit1).

1.TransformingEuropeanautomotivecompanies

Adaptingforthefuturerequirestransformation.Europeanautomotivecompanieswillneedto

continueinvestingtobringtheirpipelineofnewvehiclestomarket,boostoperationalefficiencytocutcostsandincreasespeed,andimplementregionalizedportfoliostocatertodiverging

customerrequirements.

Investmorethan€150billionannuallyinthefutureofautomotive

TheEuropeanautomotiveindustryplanstobring

about350newEVmodelstomarketby2032.Over70percentoftheseareexpectedtobeBEVs,

11

with

8“Highcostofenergy,”BusinessEurope,accessedSeptember8,2025.

9“Criticalrawmaterials,”EuropeanCommission,accessedAugust29,2025.

10“Chinadominatesglobaltradeofbatteryminerals,”USEnergyInformationAdministration,May21,2025.

11BasedondatafromS&PGlobalLightVehicleProductionForecastandtheMcKinseyCenterforFutureMobility.

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry4

Exhibit1

TheEuropeanautomotiveindustrycouldsuccessfullytransitionwithatargetedactionplan.

1TransformingEuropeanautomotivecompanies

Improvecostsby20to50%andcuttimetomarketinhalf

Implement3–4regionalizedproductportfolios

Investtobring350new

electricvehiclestomarket

2Future-proofingthevaluechain

Enable700gigawatt-hoursofbatteryproductionby2030

Buildpartnershipsforaresilientsupplyof14criticalmaterials

Develop7futureEuropeantechnologyfields

3Levelingtheplayingfield

Navigateapathwaytonetzero

Close6majorstructuralgaps(eg,energy,labor)

Invest€350billionin

infrastructureandgridby2035

McKinsey&Company

therestbeingvariouselectrichybrids,including

plug-invehicles,range-extendedvehicles,and

hydrogenfuelcellvehicles.Inrecentyears,

EuropeanOEMsandmajorsuppliershavespent

nearly€150billionannually,12splitroughlyequallybetweenR&Dandcapitalinvestments.Thismakestheautomotiveindustrybyfarthebiggestdriver

ofinnovationinEurope,responsibleforabout30percentoftotalEUinnovationspending.13

Heavyinvestmentsinnewproductionfacilitiesand

next-generationvehicletechnologywillcontinue

toberequiredincomingyears,butthesectorcan

sustainthislevelofinvestmentonlyifitcontinuestoproducehealthybalancesheets.Whilemaintaining

currentinvestmentlevelsiscritical,directingthese

resourcestowardhigh-impact,differentiatingfactors(asoutlinedinfollowingsections)willbeessential.

Diversifyingfundingsourcescouldeasethisburden:

IncreasedM&Aactivityandventurecapitalinflowscouldunlocknewopportunities,whileEU-backedlow-interestloansforcrucialprojectsmayprovideadditionalsupport.Public–privatepartnerships

couldfurtherhelpfundlarge-scaleinitiativessuch

asbatterygigafactoriesandchargingnetworks.By

focusingonbotheffectiveresourceallocationand

innovativefundingmechanisms,stakeholderscan

drivecompetitiveadvantagesandlong-termsuccess.

Improvecostsby20to50percentandcuttimetomarketinhalf

Disruptorsaroundtheworldhavegainedmarket

sharebyworkingradicallydifferentlyfrom

incumbents,heraldinganewindustrialhorizon.

Thesenewcomersoutperformontheirpaceof

productdevelopmentandplantconstructionandusenewmanufacturing,batteryinnovation,integration,anddesigntechniques.Withthesetechniques,theseplayersareputtingvehiclesonthemarketatapricepoint20to50percentlowercomparedtoEuropeancompetitorsandbringingthemtomarketuptotwiceasfast,accordingtoMcKinseyanalysis.

SeveralkeyleverscanhelpEuropeancompanieskeeppacewithdisruptors,evolvingtechnologies,andchangingcustomerpreferences:

12ElisabethNindletal.,“The2024EUIndustrialR&DInvestmentScoreboard,”EuropeanCommission,December18,2024.

13“SectoralR&DsharesintheEuropeanUnion,”ACEA,September12,2024.

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry5

—Makeradicaltechnologychanges.Adopting

anext-generation“designtovalue”mindset

focusedontruecustomerdifferentiationcan

enableEuropeanautomakerstoprioritize

featuresandinnovationsthatreinforcebrand

distinctionwhilesheddingunnecessary

complexity.Implementingadvancementsin

batterytechnology,includingoptimizingform

factorsforefficiency,andpivotingtolow-cost

chemistries—suchaslithium(withmanganese)ironphosphateorsodium-iontechnologies—

canmateriallylowervehiclecostsandimprove

supplychains.Atthesametime,simplifyingthestructuraldesignthroughapproachessuchas

cell-to-bodyintegrationcanreducepartcount,streamlineassembly,andimproveperformance.Elevatingfunctionalintegration—suchasby

combiningmultipleelectroniccontrols,adoptingbankloading,ordeployingcentralizeddomain

andzonecontrollers—minimizeswiringand

hardwarecomplexity,furthersavingcostsand

acceleratingbuildtimes.Finally,OEMsand

supplierscanthoroughlyreviewandstress-testtheirrequirements,whichoftenoriginatefrom

legacyICEbusinesspractices(forexample,

sensorredundancy,loadfactors,material

thickness,andnoise,vibration,andharshness

requirements).Stakeholderscanreassesstheserequirements,manyofwhichhavealimited

impactoncustomervalue,safety,anddurability,whileincurringunnecessarycosts.

—Accelerateproductdevelopmenttodecrease

timetomarket.Withrapidshiftsinboth

electrificationandsoftware,accelerating

developmenthasbecomecriticaltostay

competitiveandcontrolcosts.ChineseOEMs

haveprovedthattimetomarketcanbereducedtolessthantwoyears—morethantwiceasfastasestablishedplayers.Toclosethegapwith

faster-movingglobalcompetitors,European

automotiveplayersneedtofundamentally

accelerateinnovationandmovefromtraditionalsequentialengineeringtoagile,asynchronous

developmentmodels.Byadoptingtrigger-baseddevelopment—inwhichsoftwareisiteratively

testedandrefined,evenalongsideimmaturehardware—teamscancompresscriticalpaths,particularlyforsoftware-heavycomponents

suchasbatterymanagement,vehiclecontrol,andadvanceddrivingsystems.Thisshiftis

especiallyvaluablebecausethesesystems

increasinglydefineproductdifferentiationandrequirerapid,continuousiteration.

—Enhancesupplychainefficiencyandgain

advantagefromextensivesuppliercollaboration

andpartnerships.Europeanautomotive

manufacturerscanexplorenewworking

relationshipsandprocesseswithsuppliers,

suchasusingan“openbook”approachinwhich

manufacturersandsupplierscollaborativelyshaperequirementsanddesignsearlyintheprocess,

allowingforfastertimetomarket.Thisvertical

Europeanautomotiveplayers

needtofundamentallyaccelerate

innovationandmovefromtraditionalsequentialengineeringtoagile,

asynchronousdevelopmentmodels.

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry6

collaborationoftenmeansworkingsidebysidewithsuppliersandpartnerstoquicklyiterate

andexplorenewsolutionsaswellasintegratingknowledgefromthebroaderecosystem.Theseapproachescanhelpplayersmakestepchangesinperformance,cost,andtimetomarketfor

technicalsolutions,aswellasbuildlocalized,

diversified,andresilientsupplychains.PlatformandcomponentsharingamongOEMscanalsounlockeconomiesofscaleinthevaluechain.

—Optimizemanufacturingfootprintsand

processes.Manufacturersneedtoreassess

whereandhowtheyproducevehiclesand

components.Byoptimizingtheirglobal

footprintsformaximumutilizationofplants,

cost-effectivelocations,andproximitytokeymarkets,manufacturerscanaccountforcosts,fluctuatingtariffs,andsupplychainrisks.

Embracingmanufacturing-optimizedvehicledesignscanhelpsimplifyprocesssteps,

reducevariability,andstreamlineproduction.Additionally,adoptingadvancedtechniquessuchasgigacastingandunboxedormodularmanufacturingcanboostefficiency,enablingfasterexecutionandcostsavings.

—EmbraceAItounlockadditionalefficiency.

DeploymentofAIapplicationsthroughoutvehicledevelopment,production,andoperationaland

administrativeprocessescouldunlockover€100billionintotalannualvalueandefficiencygainsby2030forEuropeanOEMs,accordingtoMcKinseyanalysis.Europeanautomotivecompaniescan

embraceagenticAItoboostproductivityin

engineering,sales,andadministrativetasks;

deployautonomousroboticstohandleavarietyofproductionsteps;andstreamlineprocessesfromlogisticstodevelopmentcycles.

Greatereconomiesofscaleareessentialtoensure

thesecostandefficiencyleversdelivertheirintended

outcomes.MarketbenchmarksforpureEVplayers

indicatethatpositivemarginsthroughscalingrequire

theproductionofatleast80,000EVsperquarter,

accordingtoanalysisbytheMcKinseyCenterforFuture

Mobility.However,scalealoneisnotenough;best-in-

classorganizationalefficiencyisalsorequiredtounlockoperatingleverage.Streamlined,digitallyenabled

organizationswithrapiddecision-making,rigorous

performancemanagement,andleanoverheadsare

betterequippedtoadapttoshiftingmarketsand

regulations—andtotranslatestrategicintentinto

industry-leadingperformanceandsustainedleadershipintheglobalautomotivetransition.

Implementaregional,customer-focusedoperatingmodel

Regionalautomotivemarketsaredivergingrapidly,

propelledbymajordifferencesinelectrificationuptake,technologyexpectations,andconsumerbehavior.In

China,nearlyhalfofallnewcarssoldin2024were

“newenergyvehicles”(NEVs)—thatis,vehiclesmostlyorcompletelypoweredbyelectricenergy.WithintotalNEVsales,28percentwereBEVsand15percent

wereplug-inhybrids(PHEVs).Salesalsoincludeda

6percentshareofextended-rangeelectricvehicles

(EREVs)

14

—whichareoftenreferredtoinEuropeas

range-extendedelectricvehicles(REEVs)—along-

rangehybridEValmostuniquetoChinathatisquicklygainingpopularitythere.Bycontrast,inthesameyear,EuropesawBEVadoptionatjust14percentandPHEVadoptionat7percent,withtheUnitedStatestrailingat

10percentcombined.

15

Chinaalsostandsoutregardingexpectedfuture

demand:45percentofChineseconsumers

respondingtoarecentsurveysaidtheyplanto

chooseaBEVastheirnextcar,comparedtoonly23percentinEuropeand12percentintheUnitedStates.Anadditional37percentinChinaareconsideringa

PHEVorREEV.Notably,only18percentofChinesebuyersexpecttheirnextcartobeanICE,comparedto49percentinEuropeand70percentintheUnitedStates.However,iflong-rangehybridswerewidelyavailable,24percentofEuropeanand23percent

ofUSconsumerssaidtheywouldconsiderbuyingthese—eventhoughnearlyallofthesecustomersinitiallystatedtheywouldbuyanICE.

16

ThedemandforADAShighlightsanevenstarker

contrast:Over75percentofChineseconsumers

expressedinterestinL2+ADAS,andmorethan65

14“WhatisanEREV?,”McKinsey,June23,2025.

15BasedondatafromEVVolumes,S&PLightVehicleSales,andtheMcKinseyCenterforFutureMobility.

16“Newtwistsintheelectric-vehicletransition:Aconsumerperspective,”McKinsey,April22,2025.

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry7

percentareinterestedinL3.

17

ThismakesADASatoptenpurchasingcriterioninChina,withpremiumbuyersrankingADASevenhigher(topfour).

18

In

Europe,ADASismuchlessinfluential,withonlyabout40percentinterestedinL2+andabout30percentinL3.

19

Digitalexperiencesandbrandattitudesarealso

shiftingthelandscape.InChina,smartcockpit

featuresandvoiceassistantsarekeypriorities,

whiletheseremain“nicetohave”ratherthantable

stakesintheUnitedStatesandEurope.Chinese

consumersshowaremarkableopennesstonew

brands,with82percentinterestedinChineseEV

disruptorsandover65percentopentoswitching

toanewbrandfortheirnextpurchase,ratingbetteradvanceddrivingandsmart-cockpitperformanceasthemostimportantreasonsforpreferringa

Chinesebrand.However,whiledomesticbrand

loyaltyremainsstrongintheWest,21percentof

Europeansand25percentofAmericanssaidtheywouldconsideranewcarfromaChineseEVbrand.

Giventhesemarkedregionaldifferences,Europeanautomakers’traditionalstrategyofdeveloping

asinglevehicleplatformforglobaluseislosing

viability.Theycanswitchgearsbyadoptingamorelocalizeddevelopmentstrategy,buildingregional

supplychains,andtailoringofferingsfordistinct

markets.

20

Thisaddressestheuniqueregulatory,

infrastructure,andconsumerneedsofdifferent

regions,aswellasmitigatingsupplychainvolatility.

However,italsoincreasescomplexityandcanerodeeconomiesofscale,requiringstrategicpartnershipsandalliancesforaregionalizedsystemtoremain

costcompetitive.

Meetingthesediverserequirementscallsfor

region-specificproductdefinitions,differentiateddesignpriorities,andbrandevolution.In

software-definedvehicles,forexample,itmaybeadvantageoustoestablishdedicated,empoweredcapabilitieswithinkeylocalmarketssuchas

Chinatoaddresseachregion’suniquepaceof

digitaladoptionandconsumerdemands.Cross-functional,data-driventeamswithacustomer-

firstmindsetarecriticaltoinformproductdesign,pricingstrategies,andlocalizedcustomer

engagementbasedonidentifiedpainpoints,trends,andregionalpreferences.

Finally,collaborationwithinlocalecosystemswill

playapivotalroleinsuccessfulregionalization.

Strategicpartnershipswithlocalplayerscan

accelerateaccesstotechnologies,capabilities,andmarketinsights.Vehicledifferentiationdeveloped

inregionalhubs—particularlyininnovation-drivenmarkets—cansimultaneouslysatisfylocaldemandandcontributetoglobalportfolios.Inthecontextofincreasingregionalizationwithintheglobal

automotiveindustry,suchpartnershipscouldpavethewayforaneweraof“regionalglobalization,”

inwhichlocalizedinnovationdrivesbothregionalsuccessandglobalcompetitiveness.

Europe’sbatteryindustryneedsaparadigmchangebasedona

coordinated,strategicapproachspanningtheentirevaluechain.

17L2+andL3designatelevelsofmaturityforautonomousdrivingtechnologies.Formore,see“Autonomousdriving’sfuture:Convenientandconnected,”McKinsey,January6,2023.

18“Newtwistsintheelectric-vehicletransition:Aconsumerperspective,”McKinsey,April22,2025.

19AllconsumerdatainthissectionisbasedontheMcKinseyCenterforFutureMobility’sConsumerPulseSurvey2025.

20Formoreontheimportanceofcustomercentricityinautomotive,seeRACE2050–avisionfortheEuropeanautomotiveindustry,McKinseyCenterforFutureMobility,January2019.

Anew‘ERA’:AnactionplanfortheEuropeanautomotiveindustry8

2.Future-proofingthevaluechain

Inadditiontotransformingindividualcompany

operationswithintheEuropeanautomotiveindustry,

theecosystemhastobestrengthenedtofuture-proofthevaluechain.ThisincludesdevelopingacompetitiveEUbatteryvaluechain,doublingdownoncritical

futuretechnology,andbuildingpartnershipstoensurearesilientsupplyofcriticalmaterials.

DevelopacompetitiveEUbatteryvaluechain

AccordingtoMcKinseyBatteryInsights,Europe

accountsforlessthan10percentofglobalbattery

cellproductioncapacity—andevenlessinupstreamactivities—leavingEuropeanOEMshighlydependentonglobalsupplychains(Exhibit2).Accordingto

McKinseyanalysis,in2030,EuropeanEVbattery

demandisexpectedtobebetween600and800

gigawatt-hours(GWh),threetofourtimesthenearly200GWhcapacityinstalledasof2024.Giveninitialproductionconstraints(forexample,ramp-upand

yieldissues),expecteddemandcouldevenbefour

tosixtimestoday’scapacity.AsofJuly2025,about600GWhofannouncedbatteryproductioncapacityhasfailedtomaterializebecauseofbankruptcies

andprojectscale-downs.Exacerbatingthesituation,nearlyalllostcapacitycamefromEuropeanplayers,whileremainingprojectsaremainlyledbyAsian

companies.Additionally,thereisagrowingmismatchbetweenthebatterychemistriesindemand—such

aslithiumironphosphate(LFP)batteries,which

arecompletelydependentonChina—andcurrentproductionplans,whichremainfocusedmainlyonlithiumnickelmanganesecobalt(NMC).

Europe’sbatteryindustryneedsaparadigm

changebasedonacoordinated,strategicapproachspanningtheentirevaluechain.Achievingregionalcompetitivenesswillrequiretargetedinvestment

ofabout€200billionto€300billionby2035,

accordingtoMcKinseyanalysis,aswellasensuringtherequiredofftakebecomessufficientlyattractive.

Thisinvestment,especiallywhenproviding

below-marketfinancingmechanisms,could

helpcompensateforregionalcostdifferencestomakeEuropeacompellingbatterymanufacturingdestinationforOEMs,suppliers,battery

manufacturers,start-ups,andcapitalmarkets.In

addition,fasterapprovals,particularlyforcriticalmineralandmaterialrefining,alongwithmeasurestoattractandretaintalent,canplayakeyrolein

fosteringthischange.GettingthisprojectoffthegroundwillrequireconcertedEuropean-level

effort—notlocalinitiativesbyindividualcountriesandplayers.

Notallpartsofthebatteryproductionchainneedto

becompletelylocalizedinEurope,butstrategiccontrolincriticalareascouldhelpensureresilienceagainst

supplyshocks.Ahighershareoflocalizedprocessingacrosscellmanufacturingandupstreamactivities

couldalsosignificantlyincreasevaluewithinEurope.

Providingincentivesforsupplychainparticipation,

unlockingR&Dcapabilities,andfacilitatingskills

transfersareallessentialtostrengtheningthesestepsofthebatterymanufacturingchainwithinEurope.

Offeringjointventuresandattractiveopportunities

coulddrawinleadingforeignplayers,withanemphasisonfosteringtechnology-sharingpartnerships,deep

integrationofworld-classexpertise,andacceleratingtechnologylocalization.Public