EU will become increasingly dependent on China for lithium-ion batteries and fuel cells by the year 2030

European Union documents suggest that absent proactive measures, the EU will become increasingly dependent on China for lithium-ion batteries and fuel cells by the year 2030.

The dossier emphasizes that the European Union’s ambition to achieve net-zero carbon emissions by 2050 necessitates a diversification in energy storage modalities. This is projected to spur a tenfold to thirtyfold surge in demand for lithium-ion batteries, fuel cells, and electrolysis cells in the ensuing years.

While the EU accounts for over half of the global market share in the fabrication and assembly of electrolysis cells, it remains heavily reliant on China for the provision of lithium-ion batteries and fuel cells integral to electric vehicles. The EU’s mounting trepidation is that, without a more assertive strategy, its dependence on China by 2030 could mirror its past reliance on Russia for natural gas. Such a scenario, akin to the vulnerabilities exposed during conflicts like the Russo-Ukrainian war, could precipitate supply disruptions or significant impediments.

Analogous to the economic reverberations felt within the EU due to natural gas supply challenges, any impediments to the supply chain of lithium-ion batteries or fuel cells, precipitated by specific contingencies, could invariably send shockwaves across myriad European industries.