Europe’s Electric Backbone: A Strategy for the Future of Batteries
In partnership with Transport & Environment, Catalyse Europe and Loom Strategy
15 September 2026
Download Europe’s Electric Backbone
Batteries are the backbone of Europe’s future energy system, its industrial base and its defence readiness. Europe is embedding them across systems at record pace while producing almost none of the key inputs. All of that is supported by public money.
Europe’s Electric Backbone sets out the strategic case to strengthen Europe’s battery value chain, the security exposure Europe risks accumulating as things stand, and what the EU must do in the next three years to scale a competitive European battery sector.
Key Messages
The strategic case is built on three essential points:
Batteries are a strategic gateway technology for a sovereign Europe. They are no longer just an automotive technology, but a foundational part of the electric tech stack underpinning grids, industrial electrification, data centres and defence. Europe therefore needs to retain meaningful capability across the battery value chain, including in cells, midstream materials, manufacturing equipment and software. The objective is not full reshoring, but a resilient European backbone that reduces exposure to geopolitical coercion, supply disruption and cyber or operational risk.
The cost of inaction is higher than the cost of building resilience. Without a viable business case for European battery production, capital, skills, R&I and factories will move elsewhere, while Europe becomes increasingly dependent on concentrated foreign supply chains. That would weaken Europe’s ability to shape standards, procurement and industrial development, and make future dependencies harder and more expensive to reverse. Europe will not always compete on the lowest unit cost, but the remaining gap should be understood as part of the price of maintaining strategic agency, industrial capacity and security.
Europe needs support that is fast, focused and at scale. Europe is not starting from zero: it already has a strong research base, industrial expertise and a large internal market. The challenge is to turn those assets into competitive scale. That requires simpler and more bankable production support, stronger demand signals for European-made products, targeted support for the midstream, better mobilisation of private capital, and trade and defence policy support.
Key Recommendations
Make production support bankable and mobilise private capital.
Europe should introduce more predictable, ex-ante, output-based production support tied to verified production, while using public funding to reduce risk and unlock private investment.Create stronger demand for European-made products.
The Industrial Accelerator Act should include strong and credible Made in EU provisions so that public support and procurement create a genuine incentive for European production.Secure the whole value chain.
Support should extend beyond cells to strategically important midstream materials, processing and recycling, avoiding a situation where one part of the supply chain is de-risked while dependencies remain elsewhere.Maintain focused support for innovation.
Europe should continue to support battery research and innovation across current and next-generation chemistries, manufacturing equipment, digitalisation, recycling and raw-material processing.Strengthen trade defence and defence-industrial security.
Europe should make greater use of trade-defence tools where foreign subsidies and overcapacity undermine European industrial capacity, while introducing stronger Allied-origin and security criteria for batteries used in critical energy and defence systems.
Without these measures, Europe risks losing industrial capability that will be far harder and more expensive to rebuild later.
About the Backbone Coalition
The Backbone Coalition is focused on strengthening Europe’s battery value chain. It brings together expertise across industry, investment, energy and security to build support for the policies and investment needed to scale a competitive European battery sector.
The Coalition believes that batteries are a strategic gateway technology for Europe, underpinning secure electricity grids, industrial capacity and defence. It is working to reduce Europe’s exposure to concentrated supply-chain dependencies, strengthen European and trusted allied production, and ensure that public policy creates the demand, investment conditions and resilience needed to compete in the electrified economy.