In a report published on Monday, the institution points to problems with the availability of raw materials needed to manufacture batteries, the increase in the price of these raw materials and energy, as well as global competition that could undermine European competitiveness.
"Almost every week, a new battery gigafactory is announced in Europe," audit chief Annemie Turtelboom told a press briefing. However, "the chances of the EU becoming a world leader in battery production do not look good," she warns.
"We face the risk of the EU missing its target" of selling only new zero-emission cars by 2035, or of being able to "achieve this target only by importing batteries or electric vehicles, which would harm European industry," she said.
Bags of lithium carbonate at an extraction site in Bolivia, July 10, 2019 © Pablo COZZAGLIO, Pablo COZZAGLIO / AFP/Archives
"The EU must not end up with batteries in the same position of dependence it had with gas on Russia," the official warned.
The EU Court of Auditors predicts that "in the short term, European battery production will face a global shortage of essential raw materials".
It cites projections by the European Commission's Research Services (JRC) that "the global shortage will be truly felt by 2030, when most of the EU's battery production capacity becomes operational".
However, for five key raw materials (cobalt, nickel, lithium, manganese, natural graphite), the EU is 78% dependent on imports from a small number of countries.
Some 87% of raw lithium is imported from Australia, 68% of cobalt from the Democratic Republic of Congo and 40% of natural graphite comes from China.
An excavator fills a dump truck with blocks of stones containing lithium, on May 25, 2023 near Araçuai, Minas Gerais state, Brazil © Douglas Magno / AFP
However, the EU does not have free trade agreements with these three main suppliers that could guarantee sustainable access to these raw materials.
And some countries are associated with geopolitical risks that could jeopardize supply, says the Court of Auditors, which also emphasizes the increase in global demand.
As for the extraction of these minerals in the EU, Turtelboom noted that while lithium was present in Portugal and France, there was "on average 12 to 16 years between discovery and the start of production".
Too fair for the 2035 target, she said, adding that since not all the necessary raw materials are present in Europe, "it will not solve all the problems" anyway.
China currently accounts for 76% of global battery production and the EU 7%.
Miners haul up bags of ore from the Shabara cobalt mine in southeastern Congo on October 12, 2022 © Junior KANNAH / AFP
The EU also faces strong competition from the United States, which with its Inflation Reduction Act (IRA) offers incentives to companies that decide to set up their battery production plants there.
In response, the Commission proposed in mid-March regulatory reductions to promote green industries, including batteries, a text currently under negotiation.
Another draft piece of legislation, presented together, aims to reduce the EU's dependence on critical raw materials by promoting extraction in Europe and commercial cooperation with more suppliers.
However, the Court points to other dangers: "with the increase in the cost of production factors such as energy and raw materials, batteries and therefore electric vehicles could become unaffordable for a large number of owners", leading to "a decrease in the demand for electric vehicles and a decrease in the economic interest of investments in production facilities".
Aerial view of the brine ponds and processing areas of the lithium mine of the Chilean company SQM, on September 12, 2022 in Calama, in the Atacama Desert, Chile © Martin BERNETTI / AFP
In particular, the institution is asking the European Commission to update its strategic action plan on batteries published in 2018, paying particular attention to securing access to raw materials.
© 2023 AFP