Structural Challenges in the European Clean Industrialization Process: From Electric Vehicle Popularization to Strategic Dependence on Battery Supply Chains

Structural Challenges for Europe's Clean Industrialization: From EV Proliferation to Battery Supply Chain Strategic Dependence

Europe's green transition is viewed as a narrative of energy electrification, but data shows that while the share of electricity in final energy consumption is stagnating despite rapid decarbonization in the energy structure, this constitutes a key bottleneck in achieving climate goals. This structural disconnect forces Europe to re-examine the focus of its industrial policy, shifting from a simple energy supply transition to a deeper industrial reshaping.

Bottlenecks in Decarbonization and Electrification of Energy

Significant progress has been made in decarbonizing the EU's power system, with 71% of electricity coming from clean sources in 2024, indicating success in the energy structure transition. However, translating this energy transition into the electrification of final energy consumption remains lagging. Compared to the US, Europe's progress on this metric is relatively slow, exposing a key systemic obstacle: while the energy supply side is striving for greening, the electrification process for end-users and key sectors (like transport) has not accelerated in sync.

The transport sector is a core area for energy electrification, but its pace is constrained by multiple factors. On one hand, the massive existing fleet of internal combustion engines needs time to be phased out; on the other hand, the cost competitiveness of European domestic electric vehicles (EVs) remains a major obstacle to large-scale adoption. The purchase price of many European EVs far exceeds 30,000 euros, coupled with uneven charging infrastructure and cross-border policy differences, creates a huge threshold for low- and middle-income households to transition. Although the zero-emission target for 2035 has been set, achieving it requires solving systemic challenges related to cost, infrastructure, and policy incentives.

Structural Risks in Key Technology Areas: Batteries and Electric Vehicles

In the field of clean technology, the industrial layout of batteries and electric vehicles (EVs) reveals a significant structural vulnerability for Europe in the value chain. Data shows that although the registration of electric vehicles in Europe is accelerating, battery capacity remains heavily dependent on foreign facilities and imported raw materials. The EU shows an export advantage in electric vehicles but is in a net import position for batteries. This "export cars, import batteries" model clearly outlines Europe's dual role in clean technology: both as a leader in end-use consumption and applications, and as a strategic dependent on upstream key materials and technology links.

This dependence on external supply chains constitutes the core risk to Europe's strategic autonomy amid increasingly intensifying global geopolitical tensions. To consolidate its competitive position in clean technology, Europe must solve the contradiction between "supporting domestic manufacturing" and "ensuring supply chain resilience."

The "Clean Industrial Deal": The Policy Logic for Reshaping Industrial Competitiveness### "Clean Industrial Deal": The Policy Logic Reshaping Industrial Competitiveness

Facing these challenges, the European Union's "Clean Industrial Deal" marks a major shift in EU policy logic. This initiative aims to deeply link the EU's decarbonization goals with economic competitiveness, clearly requiring that decarbonization should not come at the expense of Europe's industrial base. This is not just an upgrade to environmental policy; it is a strategic deployment for the systemic restructuring of the European industrial structure.

The core logic of the agreement lies in: facilitating the smooth transition of clean technologies from emerging fields to mature industries, guiding funding and policy support to support the "green transition" of European traditional industries, rather than their "deindustrialization." This means the policy focus will shift from mere subsidies to building an ecosystem encompassing R&D, investment, and supply chain synergy.

Urgency of Policy Implementation: Data Transparency and Innovation Ecosystem Building

To effectively implement the Clean Industrial Deal, Europe urgently needs to solve a long-standing pain point: the lack of comprehensive, coherent, and timely data on industrial decarbonization and clean technology manufacturing. This information gap not only affects policymaking but can also lead to negative public sentiment towards climate policies, weakening political support. Therefore, establishing open data platforms like the Bruegel European Clean Technology Tracker is a key measure to bridge the information gap and promote precise policy deployment.

From an innovation ecosystem perspective, future competitiveness will depend on whether Europe can build an innovative ecosystem with global influence in cutting-edge technologies like AI and semiconductors. The transition of batteries and EVs is not just an upgrade in mechanics and energy; it is a comprehensive manifestation of digital technology empowerment and breakthroughs in material science. Europe must focus its policy tools on accelerating the conversion of key technologies from the laboratory to large-scale commercialization, ensuring that in the next round of industrial competition, Europe holds the initiative rather than reacting passively to global technological and geopolitical economic fluctuations.

Long-term Perspective: Europe's process of green industrialization is shifting from a simple energy replacement narrative to a profound contest about "strategic autonomy" and "industrial resilience." Whether this transition can be successfully navigated will determine Europe's role and geopolitical economic influence in the next global economic cycle.