EC – Battery Technology in the European Union

Batteries play a crucial role in the European Union's efforts to achieve climate neutrality and reduce reliance on fuel imports. The rise of electric mobility is driving the demand for batteries, with lithium-ion batteries expected to dominate the market. The EU aims to have 50 million electric vehicles and 160 GWh of stationary batteries by 2030. By 2050, the entire car fleet of 270 million vehicles in the EU should be zero-emission, mostly electric with some form of battery energy storage. This report focuses on various battery technologies, including sodium-ion, redox-flow, zinc-based, and metal-air batteries. Sodium-ion batteries, led by China, have reached the market and are suitable for both electro-mobility and stationary applications. Redox-flow batteries, based on vanadium or other non-toxic materials, offer flexibility for power and energy scaling and are expected to be mainly used in stationary applications. Metal-air batteries and zinc batteries are also being developed for stationary applications, with some already in commercialization. In terms of technology deployment, mobility applications currently account for 90% of battery usage, mainly in personal and light-duty commercial vehicles. The demand for Li-ion batteries in vehicles is rapidly increasing, with China leading in sales followed by Europe. Future demand is expected to reach 1.5 TWh in 2025 and 3-3.5 TWh in 2030, which would require the establishment of 50-65 new giga-factories. Global sales of electrified vehicles exceeded 10 million in 2022, with China, the EU, and the US being the largest markets. The share of electrified vehicles in China's internal market surpassed that of the EU for the first time. Battery energy stationary storage systems also experienced significant growth, with China leading the market. In terms of battery prices, there was a 7% increase in the average global battery price per kWh in 2022. However, it is expected that prices will stay stable in 2023 and start decreasing again in 2024. The average pack price is projected to fall below $100/kWh by 2026. Sodium-ion batteries are estimated to have a 30% lower cost compared to lithium iron phosphate batteries.