Around 68% of planned European lithium-ion battery production is at risk of being delayed, scaled down or cancelled, according to campaign group Transport & Environment (T&E).

Tesla, Northvolt and Italvolt are among the projects set to lose the greatest volumes of their planned capacity as the companies study investing in the US instead, T&E says in a new study. Germany, Hungary, Spain, Italy and the UK stand to lose the most if battery makers change their plans, T&E says.

Based on the announcement of 50 gigafactories in Europe, the analysis found that 1.2 terawatt-hours of cell production capacity is at a high or medium risk of being disrupted or lost. That would cover battery demand from around 18 million electric cars and, without it, Europe will need to import from foreign rivals in 2030.

According to T&E, the US’s Inflation Reduction Act (IRA) subsidies are the “chief threat” to gigafactory plans, alongside years of investment and development in China, leading to its current market dominance. Without accessible incentives and streamlined permitting, Europe is unlikely to stand a chance – it “must act or risk losing it all,” warns Julia Poliscanova, senior director for vehicles and e-mobility at T&E.

The European Commission has promised to deliver a framework to maintain the EU’s competitiveness and leadership in net-zero technologies. It should present on 14 March its response to IRA subsidies, under the Critical Raw Materials Act (CRMA) and Net-Zero Industry Act, Kallanish notes.

The study says Inobat’s proposed Serbia plant; FREYR’s Vaasa plant and its Nordic expansion; Itavolt’s Scarmagno plant and Envision AESC’s Spain project are also at high risk.

“Europe’s response should mirror IRA in focus, simplicity and visibility. A central fund accessible to all member states should prioritise battery value chains, renewables and smart grids,” adds Poliscanova. “The EU can’t compete unless it has a robust industrial policy which is focused on scaling up production and rewards environmentally sustainable projects.”