Building a local battery industry is a viable and necessary move for Western countries, but it is more about protecting future economic security than beating China on price today. Although Chinese factories currently produce batteries much more cheaply, according to the authors of the newly released report, domestic production acts as essential insurance against supply disruptions for electric vehicles and power grids.
The report states that “Building and maintaining a domestic battery production base, even at a modest scale, is less about competing with China today than about securing strategic resilience for tomorrow.” It further notes that “In the European Union, their production cost could be cut by one-third – closing a staggering 80% of the gap with China – through measures that enhance manufacturing efficiency and secure access to cheaper components and materials.”
This means that while countries like the United States and those in Europe currently find it much more expensive to make batteries, they can significantly narrow that price difference by improving factory operations and securing better access to parts. The primary goal is not necessarily to offer the lowest price immediately, but to make sure that the move to electric cars and renewable energy is not solely dependent on a single foreign supplier.
The report “Energy Technology Perspectives 2026” was published by the International Energy Agency (IEA) in Paris, France. It was prepared by the IEA’s Energy Technology Policy Division under the direction of Chief Energy Technology Officer Timur Gül.
