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A Bruegel policy brief estimates that requiring EU-made battery cells could add €2,100 to the cost of an electric car with a 60-kWh battery, before other proposed requirements. Buyers would pay more only if manufacturers pass those costs on; the final rules, subsidies and price effects are not settled. The report argues that any protection should be temporary and give European automakers time to produce cheaper EVs.
A September 22 policy brief from Brussels think tank Bruegel estimates that requiring batteries to use EU-made cells could add €2,100 to the production cost of an electric car with a 60-kWh battery. The estimate does not mean buyers will automatically pay that amount: the final rules, public subsidies and decisions by automakers about passing costs on will shape any effect on EV prices.
Bruegel’s calculation uses a projected cell-cost increase from €50 to €85 per kilowatt-hour. Applied to a 60-kWh battery, the €35 difference per kilowatt-hour amounts to €2,100. The brief also estimates that a proposed low-carbon steel requirement could add €200 per vehicle. By comparison, simplifying vehicle approval would save manufacturers an estimated €61 per car, according to the report.
These are estimates of possible production costs, not confirmed price increases at dealerships. Whether the extra expense reaches consumers depends on the details of any rules, available subsidies and how much manufacturers absorb. Bruegel warns that people shopping for lower-priced electric cars could be more exposed if costs are passed through, since a given increase would add more to the price of an affordable vehicle relative to its starting cost.
The policy debate is about balancing industrial support with affordability. Policymakers want more battery production in Europe to support local jobs and reduce dependence on China. Bruegel cautions that protection can shift costs to consumers and taxpayers, and says any such measures should be temporary and provide European manufacturers time to develop lower-cost EVs.
The Cost of Protecting EV Production
The estimates put a consumer-facing number on a central tension in European industrial policy: local production may support supply security and manufacturing jobs, but it could also make electric cars more expensive. If added costs raise showroom prices, they could make EVs harder to afford, particularly for buyers at the lower end of the market. The actual effect remains uncertain because the cost estimates are not final retail prices.
The stakes extend beyond individual purchases. The source report says European car production has fallen 19% since 2019, and buyers purchased 2.2 million fewer new cars in 2025 than in 2019. It puts employment across the wider automotive sector at around 14 million. Those figures help explain pressure to support the industry, while also making affordability relevant to the sector’s prospects: measures that raise prices could weigh on demand.
Bruegel’s brief also points to the risk that restricting imports without helping local producers become more competitive could leave buyers with fewer or costlier options. It cites research finding that EV models excluded from French purchase subsidies saw a 60% sales decline relative to eligible models. That comparison concerns subsidy eligibility in the research cited by Bruegel; it does not establish how any proposed EU battery rule would affect sales.
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Europe’s Battery Capacity Challenge
European policymakers are trying to grow a battery supply chain at a time when setting up local cell manufacturing has proved difficult. The source report points to Northvolt’s failure, Porsche’s retreat from manufacturing at Cellforce and shelved ACC factories as examples of obstacles to building production at costs competitive with China. It also notes that European factories can depend on Asian equipment and expertise.
Foreign investment is already part of that industrial base. Bruegel says South Korean firms own 65% of Europe’s battery-cell manufacturing capacity, while Chinese companies own 55% of the capacity currently under construction. The brief’s argument is that outside investment and know-how can help expand European production even as policymakers seek to strengthen local supply.
The report also discusses trade measures. EU duties on Chinese electric vehicles can reach 35.3%, according to the source material, and apply to fully electric cars rather than plug-in hybrids. Bruegel says imports of battery-electric vehicles from China have flattened while hybrid imports have surged. It proposes that a temporary agreement limiting the number of Chinese electric cars and plug-in hybrids sent to Europe could give European automakers time to develop less expensive EVs. That is a policy proposal, not a confirmed outcome of the battery-cost estimate.
“Requiring EU-made cells could raise costs from €50 to €85 per kilowatt-hour.”
— Bruegel policy brief
Rules, Subsidies and Retail Prices
The cost figures are estimates in a policy brief, not a finalized assessment of what every vehicle would cost. The source material does not provide the final wording, scope or start date of an EU-made-cell requirement, or establish that the proposed battery and steel measures will be adopted. It also does not state how subsidy arrangements might offset costs.
It remains unknown how much of any added production expense automakers would pass on to buyers, absorb themselves or offset through other savings. The €2,100 figure is tied specifically to a 60-kWh battery and the assumed increase in cell cost; it should not be treated as a set price increase for all EVs. The report’s proposed temporary limit on Chinese vehicle imports is also an option discussed in the brief, not a confirmed policy decision in the material provided.
Decisions on Industrial Protections
The next meaningful developments would be decisions on whether the EU adopts local-content or low-carbon-steel requirements, how any rules are designed, and whether subsidies accompany them. Those details will determine whether the estimated production costs materialize and how they are divided among manufacturers, taxpayers and car buyers.
Any proposed agreement limiting Chinese vehicle exports to Europe would also need to be negotiated and given clear terms, including a duration and provisions for breaches, as described in Bruegel’s proposal. Until policymakers settle those questions, the €2,100 estimate remains conditional, and the effect on retail prices and EV sales is not confirmed.
Key Questions
Would an EU-made battery rule automatically add €2,100 to an EV’s price?
No. Bruegel estimates a €2,100 increase in production cost for a vehicle with a 60-kWh battery under its cell-price assumptions. The amount, if any, added to a buyer’s price would depend on the final rules, subsidies and how manufacturers handle the cost.
How does Bruegel calculate the €2,100 estimate?
The brief estimates that battery-cell costs could rise from €50 to €85 per kilowatt-hour, a difference of €35. Multiplied by 60 kWh, that produces the €2,100 estimate.
What other proposed costs does the report identify?
Bruegel estimates a proposed low-carbon steel requirement could add €200 per vehicle. It says simplified vehicle approval could save manufacturers an estimated €61 per car.
Why does Bruegel support temporary protection?
The brief says temporary protection could give European carmakers time to build lower-cost EVs. It warns that protection could leave consumers or taxpayers paying more if it raises costs without improving manufacturers’ ability to compete.
Has the EU adopted the measures described?
The source material describes possible requirements and policy proposals, not a finalized set of rules. Their scope, timing and consumer effects remain unsettled.
Source: insideevs.com
