34 Northvolt-Sized Battery Factories Could Be Lost If EU Scales Back EV Targets — Study

A recent study by Transport & Environment (T&E) highlights the significant industrial risks Europe faces if the European Union scales back its electric vehicle (EV) climate targets. The analysis warns that weakening the EU’s car CO2 reduction goals could jeopardise the development of up to 34 battery factories the size of Northvolt’s facilities, potentially halving battery electric vehicle (BEV) production by 2030. This scenario would also increase the bloc’s reliance on oil imports by €50 billion between 2026 and 2035, undermining both environmental and economic objectives. The report compares three regulatory scenarios: maintaining current EU CO2 targets, the European Commission’s proposal to relax them, and the automotive industry’s demands for even weaker rules. Under the industry’s preferred approach, which includes averaging the 2030 target over five years and softening the 2035 target, BEV production could fall to just 3.7 million units in 2030, a sharp decline from current projections. This would severely impact the local battery manufacturing sector, with potential production capacity shrinking by more than two-thirds and resulting in the loss of up to 47,000 jobs. Julia Poliscanova, senior director for vehicles and e-mobility supply chains at T&E, emphasised the strategic importance of maintaining strong targets. She argued that Europe has the opportunity to lead the global cleantech transition by anchoring EV manufacturing domestically. Weakening climate targets, she warned, would allow China to further consolidate its dominance in the EV and battery markets, leaving the EU’s emerging industries at a competitive disadvantage. The study also underscores the broader implications for the battery value chain, particularly the production of cathodes, a critical and high-value battery component. With robust CO2 regulations, Europe could meet over two-thirds of its cathode demand through domestic manufacturing by 2030. However, under the weakened targets favoured by the automotive industry, only a fraction of planned cathode projects would proceed, meeting just over 10% of demand. This diminished local production capacity would increase dependency on imports and reduce the EU’s ability to build a resilient, sustainable battery industry. As EU lawmakers debate the Commission’s proposal, T&E urges MEPs and national governments to reject any dilution of the 2030 CO2 targets, including proposals to average emissions over multiple years. The organisation advocates for a 100% zero-emission car sales target by 2035 alongside ambitious “Made-in-EU” requirements to secure the future of Europe’s battery and EV sectors. The outcome of this debate will be crucial in determining whether the EU can maintain its position as a leader in the global electric mobility transition.