European automakers face a hidden threat from Chinese battery dominance, as reliance on Asian suppliers hinders their push for electric vehicle independence.
European battery dependency grows
The European automotive industry faces a growing challenge in its reliance on Chinese battery manufacturers, which have taken a dominant position in the global market for electric vehicle components.CATL's strong financial performance
CATL, one of the world's leading battery producers, reported a net profit of 21.2 billion yuan in the third quarter of 2026, equivalent to about 3.17 billion dollars. This represents a 14.5% increase year-on-year, though its revenue grew by 58.6% to 165.2 billion yuan.Profit growth lags behind sales
Despite its strong financial results, CATL's profit growth has not kept pace with its rising sales. This suggests that the company's expansion is not translating into a proportional increase in profitability, a trend that has raised questions among financial analysts.CATL's global market dominance
CATL's market share in the global electric vehicle battery market reached 39.4% in the first eight months of 2026, up from 37.7% the previous year. This places it far ahead of its main competitor, BYD, which holds about 15% of the market.Chinese expansion in Europe
European efforts to reduce reliance on Chinese battery suppliers are slowly taking shape, but they face significant challenges. One example is the planned CATL battery plant in Debrecen, Hungary, where the company has invested 7.3 billion euros and aims to achieve an annual production capacity of 100 GWh.Local production does not ensure independence
While producing batteries in Europe can reduce transportation costs and ensure supply, it does not guarantee technological independence. European manufacturers may still rely on foreign processes, components, and suppliers, even if production is local.European efforts to build local supply chains
Initiatives like the European project ACC, led by companies such as Stellantis, Mercedes-Benz, and TotalEnergies, aim to build local battery supply chains. However, developing the necessary industrial skills, equipment, and materials remains a significant challenge.Global reach of CATL's influence
CATL's influence extends beyond China. Between January and August 2026, it supplied 121.3 GWh of batteries to global markets outside of China, marking a 43.3% increase year-on-year. Its market share in these regions reached 33.7%, up from 29% previously.
