The European Automobile Manufacturers’ Association (ACEA) commissioned Mobility Global to analyze the potential impact of the proposed Industrial Accelerator Act (IAA). The study, titled 'IAA Impact Assessment: European Battery Supply Chain Outlook', examines whether the EU can meet the legislative requirements for battery production. Negotiations on the act are currently ongoing in the European Parliament and Council.
The proposed draft introduces two phases for battery sourcing. Six months after the law takes effect, batteries must contain three EU-sourced components, including cells. Three years later, the requirement increases to five components, adding battery management systems and active cathode materials. Analysts suggest that structural obstacles to localizing production could persist for years.
The study projects that European battery cell production will reach 306 GWh by 2032. However, analysts found that supply will fail to meet demand in all examined scenarios. This shortage could prevent approximately 3 million vehicles from qualifying for 'Made in the EU' incentives if the law enters into force in 2028.
The supply-demand gap is expected to be particularly severe for medium- and heavy-duty commercial vehicles. By 2032, the deficit for these segments is projected to reach 23 GWh, with demand exceeding available European supply by approximately four times. ACEA emphasizes that current battery value chain structures in the EU remain weak.
ACEA advocates for a more realistic approach to localization, noting that the effectiveness of the IAA depends on building upstream capacity and competitive operating conditions. The association stresses that the current framework lacks the necessary investment environment to support the ambitious requirements proposed by the European Commission.
