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A Bruegel policy brief estimates that requiring European-made battery cells could add €2,100 to the cost of an electric car with a 60-kWh battery, before a possible €200 steel cost. Buyers would pay more only if manufacturers pass those expenses on; final rules, subsidies and pricing decisions remain unsettled.
A September 22 policy brief from Brussels think tank Bruegel estimates that requiring batteries to use European-made cells could add about €2,100 to the cost of an electric vehicle with a 60-kWh battery. The estimate describes a potential manufacturing cost increase, not a confirmed price rise: buyers would pay more if carmakers pass some or all of the extra expense on to them.
Bruegel calculates that the proposed sourcing requirement could raise battery-cell costs from €50 to €85 per kilowatt-hour. Applied to a 60-kWh battery, the difference totals €2,100. The brief also estimates that a proposed low-carbon steel requirement could add about €200 per vehicle. By contrast, simplifying vehicle approval procedures is estimated to save manufacturers €61 per car.
Those figures do not establish what a customer would see on a showroom price tag. The outcome would depend on the final design of the rules, any government subsidies and how manufacturers divide the additional costs among buyers, their own margins and other parts of the business. The proposed requirements and their eventual form are not settled in the source material.
Bruegel’s broader warning is that industrial protection could make cars more expensive while supporting European producers. The brief says the costs could fall particularly heavily on people shopping at the most affordable end of the EV market, where a price increase may make a purchase harder to afford. It also argues that any protection should be temporary and give European automakers time to develop lower-cost electric vehicles.
The Price of Local Battery Production
The debate puts two policy goals in direct tension: building a stronger European supply chain and keeping electric cars affordable. Local cell production could support European jobs and manufacturing capacity and reduce reliance on imports, but Bruegel’s estimate suggests that the sourcing rules could raise production costs in the near term. Whether that reaches buyers depends on manufacturers’ pricing decisions and public support.
Affordability matters beyond individual purchases. The brief cites French research finding that EV models excluded from purchase subsidies experienced a 60% sales decline relative to eligible models. That finding concerns the models affected by those subsidy rules; it does not prove that the proposed battery requirement would produce the same result. It does, however, underscore the report’s concern that policies increasing costs or reducing financial support could weigh on demand.
The stakes extend to employment and competition. The automotive sector employs about 14 million people, according to the supplied report, while European manufacturers face pressure to compete on price, software and charging technology. If buyers face higher prices without a clear path to more affordable locally built EVs, protection could risk weakening demand even as it aims to protect industry.
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Industry Pressure and Supply Chains
The policy brief describes an industry under pressure. It says EU car production fell 19% since 2019 and buyers purchased 2.2 million fewer new cars in 2025 than in 2019. At the same time, the report cites continued exports and roughly €3 billion in quarterly investment in battery and EV factories. These figures show both the challenges facing the sector and ongoing investment; they do not settle how much protection is needed or which policies would best support competitiveness.
Building battery capacity in Europe has proved difficult. The report points to Northvolt’s failure, Porsche’s retreat from cell manufacturing at Cellforce and shelved ACC factories as examples of obstacles to matching Chinese costs. It also says factories in Europe can depend on Asian equipment and expertise. According to Bruegel, South Korean companies own 65% of European battery-cell manufacturing capacity, while Chinese companies own 55% of the capacity currently under construction.
The brief also places the proposal alongside EU duties on Chinese battery-electric vehicles, which it says can reach 35.3% and exclude plug-in hybrids. It reports that battery-electric imports from China have flattened while hybrid imports have risen. Bruegel suggests that a temporary agreement with China to limit EV and plug-in-hybrid shipments could give European companies time to develop cheaper models, but warns that fewer imported cars could cost more. The report compares this trade-off with past limits on Japanese car imports and current Canadian limits on Chinese EV imports.
“Requiring EU-made cells could raise costs from €50 to €85 per kilowatt-hour.”
— Bruegel policy brief
Final Rules and Buyer Prices
The €2,100 figure is an estimate based on the difference in cell costs for a 60-kWh battery. It is not a confirmed increase in vehicle prices, and the source material does not specify a final version of the proposed European-made-cell requirement. The potential €200 steel cost is also an estimate, while the €61 approval-related saving is a separate projected figure.
It is not yet clear whether the rules would include subsidies or other measures to offset extra production costs, how manufacturers would respond, or how much of any additional expense buyers would ultimately pay. The precise scope, timing and duration of the proposed protections—and whether any temporary limits on imports would be agreed with China—are also unresolved in the supplied material.
Decisions on Rules and Support
The next developments will be the final form of any EU sourcing requirements and decisions on related subsidies or industry protections. Those choices will determine whether the cost estimates translate into higher production expenses, how long the measures would last and whether lower-cost models receive support.
Manufacturers’ battery investments and ability to reduce EV prices will also shape the result. Bruegel argues that protection should give European producers time to build cheaper vehicles, but the source material does not set out a confirmed timetable or identify an agreed China-EU import arrangement. Until those decisions are made, the effects on vehicle prices, sales and factory investment remain uncertain.
Key Questions
How much could EU-made battery cells add to an EV?
Bruegel estimates an additional €2,100 for a vehicle with a 60-kWh battery, based on cell costs rising from €50 to €85 per kilowatt-hour. It is an estimated production cost, not a confirmed retail-price increase.
Will buyers definitely pay €2,100 more?
No. Buyers could pay more if manufacturers pass on the extra costs, but the effect would depend on the final rules, subsidies and carmakers’ pricing decisions.
What other costs does the brief identify?
The brief estimates that a low-carbon steel requirement could add about €200 per vehicle. It separately estimates that simpler vehicle approval could save manufacturers €61 per car.
Why does Bruegel support temporary protection?
The think tank argues that temporary measures could give European carmakers time to build cheaper EVs and strengthen local production. It also warns that protection could raise costs for consumers, especially buyers seeking lower-priced cars.
Are the proposed battery rules already final?
The supplied report does not describe them as final. Their design, timing, possible subsidies and effect on vehicle prices remain unsettled.
Source: insideevs.com
