The Geopolitics of Batteries

Table of Contents

Introduction

• Brussels’ Flailing Battery Push

• The Geopolitical Ramifications of Four Elements of a Battery Value Chain

• Memo 1: Battery Cells 
  Industrial and Innovation Policy

• Memo 2: Battery Management Systems in Connected Vehicles
  Cybersecurity

• Memo 3: Cathode Technology
  Export Controls

Busting the ­Leapfrogging Myth: The EU Needs a ­Comprehensive Approach to ­Next-Gen Battery Chemistries

• China’s Solid-State Battery Innovation Chain

• Pain and Protection of China’s Progress

• Policy Recommendations

Connected Vehicle ­Cyber­security: The EU Must ­Consider Non-technical Risk Factors 

• Berlin and Brussels Are Slowly Moving in the Right Direction

• Recommendations for the EU and Germany

Chinese Export Controls on Cathode Technology: The EU Must Increase ­Insight into Supply Chains

• A Chronology of Chinese Restrictions on Battery Technology

• July 15, 2025: Keeping the Edge in LFP Cathode Tech Through Export Restrictions

• October 9, 2025: More Control of Future Markets Through Increased Licensing

• Beyond November 7, 2025: Reforms of the Foreign Trade Law and Licensing Under It

• Policy Recommendations for Europe and Germany

Introduction

Batteries are used across a wide range of applications – from electric vehicles and drones to grid-scale ­energy storage systems and submarines. They are used both for civilian and military purposes. Batteries not only come with a large range of use cases but also a variety of geopolitical challenges such as cyber vulnerabilities and supply chain dependencies.

On October 9, 2025, the People’s Republic of China announced its most sweeping export controls to date (they have since been partially postponed). Covering large parts of the battery value chain, these measures are the latest in a string of geopolitical shocks that underscore Europe’s fragile energy storage ­sovereignty. They come amid a turbulent period for Europe’s battery sector marked by the bankruptcies of high-­profile firms such as Northvolt and BMZ Germany.

At this critical moment, this collection of three DGAP Memos explores the geopolitics of batteries. As detailed below, each memo examines one aspect of batteries and describes how it is the target of geopolitical tools applied by China. Each concludes with recommendations for Germany and Europe to address this targeting.

Brussels’ Flailing Battery Push

Today, Chinese battery producers command more than 65 percent of the global market with South ­Korean and Japanese firms holding most of the remainder. Europe’s role remains marginal (see Figure 1). In key battery cell components – anodes, cathodes, separators, and electrolytes – China’s dominance is even more pronounced, exceeding 75 percent (see Memo 3, Figure 1).

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While these numbers reflect current market share, the geopolitical story of batteries in Europe has been unfolding for over a decade. China’s leadership in a host of battery technologies has not gone unrecognized, of course. Brussels has launched various initiatives to lift its battery sector.

As early as 2007, the Strategic Energy and Technology Plan (SET Plan) aimed to support European battery innovation. It was updated in 2015. In 2017, the creation of the European Battery Alliance brought together more than 440 stakeholders to help shape EU policy. Building on this, the European Commission promoted innovation across the battery value chain through its two Important Projects of Common European Interest. The first of these launched in 2019 and the second followed in 2021.

Complementary efforts, such as the Strategic Technologies for Europe Platform (STEP) and the Action Plan for the Automotive Industry, sought to coordinate industrial strategy. The European Commission and European Investment Bank also launched cofinanced projects for battery manufacturing. Yet, progress remains slow. Industry leaders continue to call for faster implementation of the EU’s battery booster package. This September, battery cell manufacturers with operations in France, Germany, and Spain – ­V­erkor, ACC, and PowerCo – joined forces to ring the alarm again.

The Geopolitical Ramifications of Four Elements of a Battery Value Chain

To bridge the divide between technology and geopolitics – applying a Geo-Tech lens if you will – each of the three DGAP Memos in this collection examines how China targets a specific battery component with its geopolitical tools. Each concludes with recommendations for Germany and Europe to address these actions and thus improve their energy storage sovereignty. There are a variety of batteries and each one comes with specific use cases. Batteries in drones, for instance, need to be particularly light while the batteries used for grid storage need, above all, to demonstrate a large storage capacity. Further, each battery type comes with cyber vulnerabilities and supply chain dependencies particular to it. This series of memos focuses on conventional lithium-ion (Li-ion) batteries as they are used in electric vehicles. It will inevitably engage in simplifications that industry insiders may find irksome but – we hope – policymakers will find helpful.

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Memo 1: Battery Cells – Industrial and Innovation Policy

For well over a decade, China has made batteries a key pillar of its industrial and innovation strategies, particularly through its investments in electric vehicles, which are a focus of its Made in China 2025 plan. These initiatives have sought to localize the entire battery value chain, and China has achieved this goal in many ways. Yet, import-export data, price ­changes, and recent actions from Beijing indicate that this extensive government support has come at a cost. Most notably, it has created overcapacity in the battery sector. This glut puts pressure on global producers and fuels arguments that others should “leapfrog” China with next-generation technologies exceeding 300 watt-hours per kilogram (Wh/kg), the threshold cited in China’s latest export controls (see Memo 3). This memo by Aya Adachi and me disputes that approach, arguing instead that Europe must prepare for competition across multiple emerging battery chemistries – not just one.

Memo 2: Battery Management Systems in Connected Vehicles – Cybersecurity

This memo highlights the cybersecurity dimension of batteries. Here, issues arise when multiple battery cells are connected to form a module or pack in which their charge and temperature is monitored by a Battery Management System (BMS). Because such systems are almost always digitally connected, they introduce potential cybersecurity vulnerabilities. Indeed, batteries can only become part of a “connected vehicle,” the not-so-distant future of mobility, through a BMS. Here, Valentin Weber and Maria ­Pericàs Riera argue that non-technical risk factors, especially the trustworthiness of the country of origin of BMSs, should play a more important role in assessing overall system security.

Memo 3: Cathode Technology – Export Controls

With major parts of the battery value chain now dominated by Chinese firms, Beijing is leveraging this position – most visibly through new export controls. This memo focuses on China’s evolving restrictions on lithium iron phosphate (LFP) cathode technology, the global benchmark in lithium batteries exemplified by CATL’s Shenxing Pro line. These actions coincide with rising US-China-EU tensions as the European Commission weighs requiring technology transfer in battery joint ventures. I argue that such controls make it essential for European manufacturers to engage ­selectively and strategically with Chinese partners.