How Chinese Battery Companies Go Global to Europe: Opportunities and Strategic Policy Guidance [New Energy Summit]

At the 2025 (10th) New Energy Industry Expo - Overseas Market Forum hosted by SMM Information & Technology Co., Ltd., Dennis Roman Gallus, Chief Consultant at Roland Berger International Management Consulting, discussed the topic of "How to Enter Europe: Opportunities and Strategic Policy Guidance for Chinese Battery Companies." Entering the European Market: Opportunities and Challenges for Chinese Companies. 1. The European market is the largest overseas market for Chinese battery companies. 2. Local production in the EU provides opportunities for Chinese companies, especially after 2028 when more openings are expected. 3. Well-planned and executed market entry is a prerequisite for successful entry into the European market. Europe is the largest market for Chinese battery companies outside of China. Europe is the only region expected to achieve full EV adoption by 2040, while North America and China still have room for growth. Even with the recent slowdown in EV sales growth, the European market is expected to increase to over 900 GWh by 2030 and reach around 1,800 GWh by 2040. In Europe, the demand for light vehicles is shifting towards low-cost battery chemistries such as L(M)FP, with its market share expected to reach around 25% by 2032. Regulations play a significant role in the EU: the Critical Raw Materials Act (CRMA) sets local production targets by 2030, and the Net-Zero Industry Act provides support. By 2032, the EU's battery demand is expected to translate into an annual demand of approximately 890,000 mt for LFP/LFMP, 990,000 mt for Ni-Co-Mn/Ni-Co-Al, and 1.03 million mt for ternary cathode materials. Opportunities for local production in the EU exist for Chinese companies, especially after 2028 when vacancies are expected. Local battery production in the EU may face supply shortages, as most of the announced capacity comes from followers and new entrants—about 50% of the capacity is at risk by 2032. In addition to battery supply, local supply of lithium raw materials and refined lithium is far below local demand due to widespread project delays and cancellations. Most strategic OEM partners have been designated as battery suppliers until 2028—though "vacancies" still exist thereafter. Current discussions about China potentially increasing tariffs on the EU further add to the risks of import dependency and the need for localization. China currently dominates the battery supply chain, leading to high EU dependence on China. The EU's anti-dumping tariffs on Chinese EVs were introduced in 2024 in response to the EU's investigation into Chinese EV subsidies, with tariffs ranging from 7.8% (Tesla) to 35.3% (SAIC), depending on the manufacturer; discussions about further trade barriers currently existing in the EU. The risk of a trade war, tightening tariffs, and potential export bans by China; high uncertainty leads to increased demand for local production capacity in the EU. Properly planned and executed market entry is a prerequisite for successful entry into the European market. Most Chinese producers choose Hungary as a production site—often without a comprehensive evaluation of alternatives. Hungary has the most favorable cost position, but the supply of skilled labor, green energy, and water resources, as well as political and tax risks, pose significant challenges. Key Takeaways. The European battery market has become the most important overseas market for Chinese battery companies and is the largest market. To succeed in the European market, low-cost and low-carbon footprint localized production is becoming increasingly important. Market segmentation and customer selection are key to market success. Although smaller segments may bring higher profits, key procurement criteria must be met—beyond price, a company's local influence and track record are particularly important. Sustainability is a basic requirement. Own investment is not the only option; partnerships and joint ventures can also be considered. Site selection should be cautious, considering not only current costs but also the availability of skilled labor, green energy supply, and political risks. In the rapidly evolving European battery market, a well-planned and executed market entry strategy is a key factor for success. Click to view the special report on the 2025 (10th) New Energy Industry Expo.