The European Union is working to strengthen its position in the automotive industry, but it still faces challenges, especially in the production of active cathode materials, a key component in batteries for electric vehicles. These materials are currently dominated by China, which plays a major role in both the design and manufacturing of vehicles, including electric ones. For example, Renault has established two research and development centers in China, highlighting the country's influence in the sector. Additionally, Chinese companies such as CATL and BYD are leading in battery production, and many vehicles sold in Europe are equipped with batteries made in China. To address these issues, the European Commission introduced the "Industrial Acceleration Act" (IAA) on March 4, aiming to boost local production of electric vehicles and their components. The IAA is still being negotiated between the European Parliament and member states. Under the proposed rules, electric vehicles funded by public money—such as those receiving purchase subsidies or tax benefits—must be assembled within the EU. At least 70% of their components (excluding batteries) should be produced in Europe, and their batteries must include at least three European components, including cells, increasing to five components by 2030, including cathode materials. In an effort to support local battery production, the EU allocated 4.6 billion euros through its Innovation Fund in December 2024, with 1 billion euros specifically reserved for battery cell manufacturing. According to the NGO Transport & Environment (T&E), in a report published on October 1, it is possible for Europe to meet its battery needs by 2030 under certain conditions. T&E estimates that local production could cover demand for subsidized company cars by 2027 and a large portion of subsidized private cars by 2030. However, this projection assumes that all announced factory projects will be completed, which may not be certain. Despite these optimistic projections, T&E notes that a quarter of the announced battery cell capacity in Europe since 2022 has been canceled or delayed, including projects such as the ACC plant in Kaiserslautern and Cellforce, Porsche's battery subsidiary, which was recently closed. The NGO also responds to the European Automobile Manufacturers' Association (ACEA), which warned that the industry might struggle to meet the IAA's requirements, as it takes nearly a decade to move from planning to full production of a battery factory. ACEA has called for a gradual implementation of the new rules. Europe still heavily relies on China for active cathode materials (CAM), a crucial part of battery production. While over 529,000 tons of annual capacity have been announced for CAM production in Europe by 2030, T&E estimates that only about 177,000 tons are likely to be produced once the chances of each project being realized are considered. China currently controls up to 90% of global production capacity for these materials and their precursors, and this figure rises to 95% for materials used in LFP (lithium-iron-phosphate) batteries, a type increasingly favored by European automakers for its cost-effectiveness. Volkswagen, for instance, is looking to expand its use of this technology. Additionally, China holds a monopoly on rare earth elements, which are vital for electric motors and other equipment, though this is a separate issue.