EU battery rules challenge European truck manufacturing

European truck manufacturers could face significant difficulties meeting proposed EU local-content requirements for batteries, with a new study finding that around half of medium and heavy trucks produced in Europe would currently fail the proposed battery-cell criteria.

The study commissioned by ACEA and carried out by Ricardo examined the potential impact of “made in the EU” provisions being considered under the Industrial Accelerator Act. The planned rules would link access to measures including public procurement, purchase subsidies and tax incentives to the use of qualifying European components.

Battery materials represent a further constraint. Fewer than 5% of battery cells used in EU-made trucks are expected to contain EU or UK cathode active material in 2027, according to the research. Although alternative supplies of LFP batteries outside China are expected to increase, Ricardo found that available capacity would remain limited and face competition from other users.

ACEA said this would make it difficult for heavy-duty vehicle manufacturers to meet additional requirements for Union-origin cathode active material that would apply three years after the legislation entered into force. The association called for localisation requirements to be introduced only after sufficient European supply suitable for heavy-duty vehicles becomes available, which it said was unlikely before 2035.

The study also identified implications for trade with the UK. Limited access to qualifying European batteries could make it harder for EU truck manufacturers to satisfy battery rules of origin under the EU-UK Trade and Cooperation Agreement, potentially leaving a large share of EU-produced trucks exposed to tariffs when exported to the UK.

ACEA called for a temporary adjustment to the EU-UK battery rules of origin, citing an estimated industry-wide tariff cost of almost €1.5 billion under the existing arrangements.

For other components, the study said available data were insufficient to determine the European share of green steel and low-carbon aluminium. More than half of major electronic components used in EU-produced trucks are currently sourced from Europe, while the European share of e-powertrain components is below half. Both shares are expected to decline.