T&E Study: Poor Supply of Battery Metals in the EU

On the European market, automakers have secured not even one-fifth (16%) of the key battery metals they will need by 2030. This is shown by an analysis of publicly disclosed contracts. According to this analysis, only Tesla and BYD are doing enough to guarantee their supply of cobalt, lithium, and nickel in line with their sales goals for 2030. Most European manufacturers are comparatively far behind—except for Volkswagen and Stellantis. The analysis is part of a ranking by Transport & Environment (T&E) which evaluates manufacturers based on their raw material supply chain, battery cell strategy, and responsible practices. It should be noted, however, that not all manufacturers have disclosed their activities in raw material procurement—this does not necessarily mean they are lagging behind other competitors in their procurement strategy.

VW achieves good ratings

Tesla leads the overall ranking due to its strong strategies for raw material procurement and battery cell production but falls behind several competitors in terms of responsible practices. Volkswagen scores relatively high in all three categories and achieves second place, just ahead of BYD, which performs best in the raw materials category.

German Manufacturers Remain Tight-Lipped

Only six companies – Tesla, BYD, VW, Ford, Renault, and Stellantis – have long-term contracts for the three most important metals or are planning to change battery chemistry to end their dependency on one of the metals, according to the analysis. Mercedes-Benz has only one publicly known contract for one of the key minerals. BMW has so far released insufficient information regarding the company's plans to secure nickel, cobalt, or cathode materials.

"There is a massive gap between the electrification goals of automakers and their strategies for critical metals. Tesla and BYD are far ahead of most European companies, which are only now confronting the challenge of securing essential battery raw materials. Our ranking should be a wake-up call for CEOs and investors,” says Friederike Piper, E-Mobility Consultant at T&E Germany.

German Manufacturers Responsible

The German manufacturers – BMW, Mercedes-Benz and VW – lead the ranking when it comes to responsible practices in supply chains. This includes the traceability of raw materials, CO₂-reduced processes, as well as the protection of human rights and the rights of indigenous peoples – criteria important not only for consumers but also for investors. BYD was rated with zero points in this category because no information about the car manufacturer's sustainable practices was available.

Low Resilience to Supply Chain Shocks

When evaluating the manufacturers' resilience to supply chain shocks, VW, Stellantis, and Mercedes-Benz perform best. Given the increasing tensions between the EU and China, this is an important factor. Besides Renault, these three companies are the only car manufacturers supporting start-ups in the fields of battery components and mineral processing across the EU. According to T&E, the automotive industry can contribute to the growth of the green-tech industry in Europe by localizing refineries, cathode production, and other components, while also increasing local supply security.

"The strategies of car manufacturers for robust and sustainable supply chains are crucial for Europe’s transition to e-mobility. When manufacturers support local production of battery components, they also strengthen their own resilience and competitiveness. Currently, the European automotive industry has a clear lead when it comes to making supply chains cleaner. This is crucial for public acceptance and ESG financing,” explains Friederike Piper.