EV Buyers Could Foot The Bill For Saving Europe’s Carmakers

A new report warns that Europe’s push for homegrown batteries could add €2,100 to an EV’s cost.

Photo by: General Motors

By: Andrei Nedelea

Nov 7, at 8:09am ET

Comment

Requiring EU-made battery cells could add €2,100 to the cost of an EV with a 60-kWh battery.
Buyers could pay more if carmakers pass on those costs.
Bruegel says protection should be temporary and give European carmakers time to build cheaper EVs.

Buying a European EV can come with a potentially expensive catch. Policymakers want more of the batteries powering Europe’s electric cars to be made locally, helping secure jobs and reduce dependence on China. But those batteries cost more to produce, and someone has to cover the difference. It will likely be the buyer.

That’s the warning in a September 22 policy brief from Brussels think tank Bruegel, which was picked up by Euronews. The report argues that protecting established manufacturers risks leaving consumers (and taxpayers) with the bill.

Its battery calculation is pretty straightforward. Requiring EU-made cells could raise costs from €50 to €85 per kilowatt-hour. Multiply that by 60 kWh, and it works out to €2,100. A proposed low-carbon steel requirement could add another €200. Simplifying vehicle approval, meanwhile, would save manufacturers an estimated €61 per car, according to the report.

Volkswagen Group PowerCo Battery plant in Salzgitter, Germany.

Photo by: Volkswagen

None of this is set in stone, though, and what buyers would actually end up paying depends on the final form of the rules, government subsidies, and how much of the extra cost carmakers pass on to consumers. Regardless of the details, those looking to buy at the most affordable end of the market would be hit hardest.

The pressure to protect Europe’s industry is real. EU car production has fallen 19% since 2019, while buyers purchased 2.2 million fewer new cars in 2025 than in 2019. The wider automotive sector employs around 14 million people. However, Bruegel also points to continued exports and roughly €3 billion in quarterly investment in battery and EV factories. It raises concerns that Europe is gradually losing technology, suppliers, and overseas customers.

We saw this at the Paris motor show this year, where Chinese brands brought compelling software, luxurious gadget-filled interiors, and advanced charging technology, while European manufacturers leaned heavily on their history and design. The BMW iX3 and Mercedes’ electric GLC showed that Europe can fight back, but a familiar badge doesn’t sell cars as easily as it used to.

Local battery production is a hugely important component, but it’s proving difficult to set up in Europe. Northvolt’s failure, Porsche’s retreat from manufacturing at Cellforce, and shelved ACC factories show how hard it is to match China’s costs. Even batteries made in Europe often rely on equipment and know-how from Asia.

Europe’s additional duties on Chinese EVs, which can be as high as 35.3%, targeted fully electric cars while excluding plug-in hybrids. Bruegel points to flattening BEV imports from China while hybrid imports surge. It also cites French research that found EVs excluded from purchase subsidies suffered a 60% sales decline relative to eligible models, potentially slowing overall adoption and strongly suggesting that subsidies matter.

Bruegel says agreeing with China to temporarily limit the number of electric cars and plug-in hybrids sent to Europe could help. That would give European carmakers more time to develop cheaper EVs. The deal would have a clear end date, and restrictions could tighten if China broke it.

What do you think?

View

Comments

But with fewer Chinese cars available, they could end up costing more. Europe previously limited Japanese car imports, and Canada now limits Chinese EV imports. Both show the trade-off: protecting local carmakers can make cars more expensive for buyers.

Foreign investment can help Europe catch up, the report's authors argue. South Korean firms already own 65% of its battery cell manufacturing capacity, and Chinese companies own 55% of the capacity currently under construction. European factories need that outside expertise to function.