Concentration and commercial pressure can exist together. An industry can dominate world supply while some of its participants struggle to make money.
Scale changes the terms of competition
China accounted for more than 80% of global lithium-ion battery output in 2025. Worldwide nameplate manufacturing capacity exceeded 4 TWh by the end of that year. These figures measure different things: output is what factories produced; capacity is their rated potential. Source: IEA
For policymakers, low purchase prices are only one part of the calculation. Dependence on a concentrated supply base can narrow future choices even when the immediate consumer benefit is attractive.
Europe is exposed, but still producing
The IEA reports that EU electric-car production rose about 30% to around 3.2 million in 2025. The EU remained a net exporter. China supplied roughly 60% of EU electric-car imports, but those imports represented less than one-fifth of EU electric-car demand. Import share is not total market share. Source: IEA
These distinctions matter. They allow a serious challenge to industrial policy without turning a competitive disadvantage into a claim that Europe no longer makes electric cars.
Overcapacity does not spare Chinese companies
Large scale does not guarantee comfortable margins. The IEA describes losses among many cathode-material suppliers during 2023–2025. Other businesses remained strongly profitable. “China” is not one company with one balance sheet. Source: IEA
Our interpretation is that capacity incentives and price competition can transmit pressure across borders: lower prices help buyers, but may also undermine investment and push weaker producers towards consolidation. The distribution of those gains and losses deserves scrutiny.
Ask better questions of the next gigafactory
Who will buy its output? Is the announced capacity financed and commissioned? Where are the cells, active materials and refining located? What is the realistic ramp-up schedule? What happens if prices fall?
A factory announcement is not yet industrial resilience. Europe should assess projects through demonstrated output, skilled employment, supply diversity and financial durability—not the size of a headline capacity figure.
Sources & further reading
- Global EV Outlook 2026: Electric vehicle batteriesIEA · 2026 · data for 2025Intergovernmental research
- Global EV Outlook 2026: Manufacturing and tradeIEA · 2026 · data for 2025Intergovernmental research
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