Battery Power: Greening Europe’s Automotive Sector in the Era of Weaponized Trade

Pálma Polyák

The electric vehicle battery sector is identified as a strategic industry by the European Union. Battery gigafactories are rapidly rolled out, showered with subsidies under the EU’s (geo)political industrial policy drive. The vision is an unbroken EU-based value chain, reducing reliance on China. Although imports could bring faster decarbonization, EU officials outline three aims for localizing battery production: promoting domestic industry; climate neutrality; and strategic autonomy. However, the hierarchy and meaning of these often conflicting aims remain unclear. This inquiry focuses on German-owned automotive firms' pan-European value chains – at EU-level and in Germany and Hungary. It finds that climate neutrality and strategic autonomy are subordinated to promoting industry. Hungary’s “battery superpower” ambitions, relying on Russian fossil fuels and weakened environmental protections, are particularly alarming. Both German and Hungarian production is to be covered largely by Chinese firms’ assembly lines, without meaningfully reducing strategic dependencies on China. Hungary’s autocratic political regime also presents a paradox: while seeking less reliance on non-democratic external powers, the EU is increasing exposure to an autocratic member state.