Strengthening European Battery Value Chains through the Industrial Accelerator Act
Held 2 September 2026
In partnership with Transport & Environment, Catalyse Europe and Loom Strategy
Batteries are the backbone of the modern economy. On 2 September, EIES and its partners convened policymakers, CEOs and senior leaders from across the battery value chain to discuss what the Industrial Accelerator Act (IAA) must deliver.
The message was unequivocal: the IAA could become a defining intervention in European industrial policy, but it will succeed only if it changes investment decisions and builds production in Europe.
Key Messages
The IAA can become Europe’s most consequential industrial-policy decision in generations and its most serious demand-side tool up to date, if done right. This was the shared view of high-level participants from across the battery value chain, including cell manufacturers, midstream materials producers and recyclers during the roundtable. Batteries are the backbone of a modern economy, critical for transport, grids, defence systems, drones and robotics. Losing leadership in batteries risks weakening Europe’s position in future technologies, with broader consequences for prosperity and strategic agency.
There is an urgent need for speed.The market is developing rapidly, and investment and supply-chain decisions are already being made. Participants warned that the IAA’s period of leverage may be limited because electric vehicles will become dominant regardless of whether their components are produced in Europe. The cost of inaction is industrial decline, economic coercion and dependence on technologies controlled by potential adversaries. This far outweighs the cost of demand-side measures.
The IAA has already had a positive impact on investment decisions, particularly in cathode active material. Its long-term impact depends on a whole-value chain approach, speed, clarity, predictability and removing counterproductive loopholes that go against the IAA’s goals.
Key Recommendations
Define "Made in Europe": To prevent regulatory arbitrage, the definition of "Made in Europe" must be precise and restrictive. Automatically extending eligibility to all Free Trade Agreement (FTA) partners risks diluting the IAA’s impact. Instead, an opt-in approach based on clear criteria is needed, and provides extra leverage to the EU in negotiations with third countries compared to an opt-out approach.
Build robust Union origin incentives. Batteries, their key components and supply chains need to be included in the IAA. Making a more strategic use of public resources, from EV subsidies to public procurement, is vital in the current context. It is particularly essential to focus on corporate vehicles as a key demand driver, as tax incentives for corporate EVs cover 60% of the EV market in the EU.
Take a Whole Value Chain Approach: A fragmented approach risks leaving critical segments of the battery value chain developed elsewhere. The IAA must cover the entire value chain, including battery cells, midstream materials - e.g., CAM, precursor cathode active materials (pCAM), and anode active materials (AAM), and recycling occurring in Europe. pCAM and AAM are currently left out of the IAA scope. Participants warned that derisking only part of the supply chain while leaving the rest dependent on China creates strategic vulnerabilities.
Address the Cost Exemptions: The cost exemptions in the current draft compromises the demand signal, risking a race to the bottom and opting by default for cheaper, non-European alternatives. To maintain the IAA’s integrity the cost exemptions should not allow Chinese products to undercut European ones. Ambiguity in language needs to be avoided as it will weaken the demand signal, make the IAA an optional framework (“à la carte”) and enable circumvention.
Complementary Measures: To ensure European projects are bankable and scalable, the IAA must be paired with better financing mechanisms such as output-based production support, where incentives are tied to actual output. This will boost efficient companies that are able to build technological and process know-how. Support must also be considered for existing European capacity to help businesses that have already invested to scale rapidly. Trade defence should additionally be considered to protect Europe’s nascent battery industry. Participants also emphasised the need for predictability in regulation to attract private capital and sustain long-term industrial growth.
Without these measures, the IAA risks failing to pull the wider supply chain into Europe. Europe’s energy security is closely linked to trade security, financial stability and geopolitical choices.