The European Union’s battery market is on the verge of an unprecedented expansion over the next decade. The projected growth of approximately 200 percent, driven by the continent’s electromobility ambitions, might at first glance appear to be an unequivocal triumph for the industry. However, the technological focus is shifting toward cheaper cell chemistries that contain fewer valuable metals.
The comprehensive study titled „Zellchemien im Wandel” (Cell Chemistries in Transition), jointly published by Stiftung GRS Batterien and Macrom Market Research and Consulting, sheds light on a critical issue: if the industry does not immediately rethink the financing and regulatory models of battery recycling, the pillars of the European circular economy could collapse. Our analysis relies on quantitative data and findings from the original official documents to outline the expected market and technological developments.
Explosive Growth in the EU Battery Market
The transition toward climate neutrality and the electrification of the transport sector is generating massive demand globally and at the European level. Based on the meta-analyses of the research, annual battery demand in the European Union is expected to reach 1.0 to 1.3 terawatt-hours (TWh) by 2035. This figure represents a drastic 200 percent increase compared to 2025 volumes. The primary engine of this growth is indisputably electromobility, which consistently accounts for around 70 percent of total demand across various scenarios.
However, based on primary expert interviews conducted for the study, future demand could exceed even the literature estimates. While literature research projected a total EU demand of 4.08 million tonnes by 2035, the experts (Macrom) estimate the mass of batteries entering the market at 4.89 million tonnes.
This discrepancy arises because the experts integrated industrial batteries and high-mass lead-acid technologies into their model. The analysis also points out that demand for e-mobility has been somewhat slowed in recent years by the phasing out of subsidies, uncertainties regarding vehicle residual value, and high initial costs. In contrast, the market for stationary energy storage is expanding dynamically on both industrial and residential levels, driven by growing demands for a consistent and secure power supply.
Technological Shift: The Rise of Cost-Effective Alternatives
Alongside dynamic demand growth, the market structure is also undergoing a significant technological realignment. Within traditional lithium-ion (LIB) systems, there is a clear shift toward L(M)FP (lithium iron phosphate and lithium manganese iron phosphate) technologies. According to the GRS analysis, this segment will show the strongest growth dynamic, at 28 percent annually, up to 2030.
The primary reason is a substantial cost advantage: L(M)FP technology is approximately 30 percent cheaper at the cell level and 20 percent cheaper at the module level compared to NMC (nickel-manganese-cobalt) technology. Base scenarios suggest L(M)FP’s share of the European automotive market could reach 60 percent, or even up to 80 percent with rapid technological progress. NMC batteries—with an estimated annual growth of 15 percent until 2030—will remain relevant but will be largely restricted to the performance-intensive premium vehicle market, as European buyers continue to prioritize long range.
The most significant breakthrough, however, comes from sodium-ion (NIB) batteries, which are expected to secure major market share starting in 2030. According to experts, due to the global abundance and safety of sodium, NIBs could displace L(M)FP and lead-acid solutions in more price-sensitive sectors. By 2035, sodium-ion systems could dominate 55 percent of the starter and auxiliary battery market and 54 percent of the stationary energy storage market. Solid-state and semi-solid-state batteries (SSB/SSSB)—although nearly 100 companies globally have announced production plans with a total capacity of over 100 GWh—are expected to be limited to specialized, high-performance applications in the short to medium term.
The End of Profitable Recycling? New Risks for the Industry
Technological diversification and the rise of cheaper technologies requiring fewer critical metal raw materials pose a severe challenge for waste management operators and policymakers. The GRS research highlights that in 2025, 62 percent of the battery mass entering the market (roughly 701,085 tonnes) consisted of high-value chemistries containing expensive metals, while the remaining 33 percent (371,787 tonnes) was considered low-value.
By 2035, this ratio will be drastically reversed: cell chemistries made from non-valuable, cheaper raw materials will account for 60 percent of the market, translating to approximately 2.958 million tonnes. Concurrently, the share of valuable metal-based technologies will drop to 38 percent (1.881 million tonnes). Georgios Chryssos, Board Member of Stiftung GRS Batterien, issued a stark warning in the released press statement: as the market permanently pivots toward cheaper cell chemistries, the old recycling model based on revenues from metal sales will no longer be sustainable. The foundational principle of the recycling industry—that the process can be economically financed through the recovery of valuable metals—is definitively coming under pressure.
Urgent Actions to Save the Circular Economy
The report outlines a clear action plan. Although the mass emergence of scrapped batteries made from low-value materials is still pending due to their long lifespans, the new environment immediately requires a complete rethinking of collection infrastructure, regulatory frameworks, and, above all, financing concepts. The authors emphasize that in the future, battery policy, industrial policy, and circular economy strategies can no longer be treated in isolation.
From a macroeconomic perspective, the decreasing proportion of critical metals also presents an opportunity: it can significantly reduce the European Union’s vulnerability regarding global supply chains and support the objectives of the EU Critical Raw Materials Act. However, to prevent these used batteries from ending up as unmanageable economic and environmental burdens, new, stable financing incentives for recycling—ones not based solely on market metal prices—will be required. The goal of Stiftung GRS Batterien, as the official central foundation responsible for coordinating take-back systems, is precisely to proactively accelerate the development of these new, sustainable models.
References / Original Sources: The quantitative data and findings utilized in this article are strictly based on the official publications of Stiftung GRS Batterien.
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Official Study (PDF): Marktstudie_Zellchemien_im_Wandel_GRS-PM.pdf
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Official Press Release: Stiftung GRS – Europas Batterieboom setzt das Recyclingmodell unter Druck