No more combustion engines from 2035 – but where will the batteries come from? Europe's reliance on China's rare earths – Will the EU law fall after all?

The EU has set a big target: starting in 2035, no new gasoline or diesel cars can be sold. Only new emissions-free vehicles will be allowed – a milestone in the fight against climate change and a clear message to the car industry. Manufacturers are competing with electric models, charging stations are popping up everywhere, and politicians are patting themselves on the back. But beneath the shiny surface, a problem is being increasingly discussed: where do all the batteries for these electric cars actually come from?

The answer inevitably leads to China. When it comes to many critical raw materials like rare earths, lithium, or graphite, Europe is massively dependent on the Middle Kingdom. Without Chinese refineries and supply chains, not much can happen. This raises uncomfortable questions: can we even achieve our transport revolution without shifting our dependency – from oil in the Middle East to rare earths from China? Is the big phase-out of combustion engines even realistic? Or is a political promise standing on shaky ground?

In this article, we examine the true extent of Europe's battery dependency, which car manufacturers are smartly securing themselves, and what strategies are in place to break free from China's grip. We also ask: is there a risk that the 2035 ban might even collapse politically in the end?

Ban on Internal Combustion Engines from 2035

The EU has sent a clear message with the ban on internal combustion engines starting in 2035: The future of cars is meant to be electric. Manufacturers worldwide are preparing to make their car line-ups entirely electric. However, behind the glossy brochures of car manufacturers lies an inconvenient truth: Electric mobility requires raw materials. Many of these materials are far from being unlimited or without geopolitical issues. Particularly problematic is Europe's heavy reliance on China.

80% of Rare Earths in the Middle Kingdom

China not only controls large portions of rare earth mining, but it also dominates the processing stage. About 80% of the world's refining capacity for rare earths is in the Middle Kingdom. These materials are crucial for the motors and electronics of electric cars, as well as for battery chemistry. Graphite, an important component of anodes, is also primarily processed in China. Even with lithium, which is found worldwide (such as in Australia or South America), China leads in refining. This dependence is often overlooked when European politicians tout the goal of millions of new electric cars per year.

The EU has indeed recognized the problem. The "Critical Raw Materials Act" passed in 2023 is intended to help reduce this dependency. Europe wants to establish its own projects, from mines in Sweden to processing plants in Portugal and recycling centers in Germany. The aim is to supply at least 10% of its needs domestically and have 40% of processing capacity in Europe. But that's easier said than done: Approval processes take years, investors are cautious, and resident protests are expected. While Europe plans, China is already building and securing mining rights globally.

This is a real challenge for car manufacturers. Volkswagen, for example, is investing billions in its own battery factories in Salzgitter and Valencia, aiming for more control over cell production and recycling. Meanwhile, Tesla is pursuing a global procurement strategy, with supply contracts in Australia and the USA, to become less reliant on Chinese suppliers. At the same time, Tesla is heavily investing in LFP batteries (Lithium Iron Phosphate), which require less cobalt—another critical material often extracted under questionable conditions in Africa. In contrast, BYD in China has possibly the greatest advantage: The company is vertically integrated in many areas and controls large parts of its supply chain, from extraction to the finished battery.

Solid-State Batteries as Game Changers

At the same time, alternatives are being researched. Solid-state batteries are considered game changers because they could require fewer critical raw materials and promise higher energy densities. Companies like Toyota, VW, and smaller startups are working intensively on this. Sodium-ion batteries are also in focus—they do not use lithium and could be a solution for more affordable models. However, all these technologies are not yet ready for large-scale serial production.

All this raises questions: Is it even realistic to meet the goal of a 2035 combustion engine ban when dependency on China for battery production is so high? Some critics clearly say no. They advocate for more technological openness and want to keep e-fuels and hybrid drives in the running. Others warn that too much dependence on China could be geopolitically dangerous, especially in a time when relations are cooling. Yet others say that only if demand is there, will investments in domestic projects become economically attractive. Without clear political pressure, Europe risks being left behind technologically.

The political debate has long erupted. Some EU states want to push for exceptions for e-fuels, while others want to accelerate funding programs for battery recycling. There's contention over subsidies, environmental regulations, and industrial strategies. One thing is certain: Time is running out. If Europe truly wants to implement the combustion engine ban by 2035, solutions must be found quickly—or the ambitious law could end up being scrapped or watered down.

The ban on combustion engines starting in 2035 is currently firmly embedded in European legislation—a strong political signal for climate protection and innovation. However, behind the ambitious goals lies a complex reality. Without its own raw material supplies, recycling systems, and technological alternatives, Europe could stumble into a new dependency: shifting from Middle Eastern oil to rare earths and battery materials from China. This would not only be an economic risk but also a geopolitical one.

Car manufacturers recognize these challenges and are already responding with multi-billion dollar investments in battery plants, recycling facilities, and supply contracts outside of China. Tesla, VW, Stellantis, and others aim to diversify their supply chains and develop new cell chemistries without cobalt or nickel. At the same time, startups and corporations are experimenting with solid-state and sodium-ion batteries that are less critical. But all these projects need time—time that is becoming increasingly scarce as 2035 approaches.

For consumers, this issue primarily means one thing: uncertainty. Will electric cars become cheaper in the future because production and resources become more European? Or will prices rise because China dictates conditions as the dominant player? Can recycling and new mining projects meet the demand at all? Or does the major goal of emission-free new registrations in 2035 need to be politically adjusted once more? The discussion is in full swing—and it will become much fiercer in the coming years.

One thing is certain: without a massive industrial push in Europe, smart trade agreements, and determined research, the 2035 combustion engine ban will be difficult to uphold. The path to climate-friendly mobility remains challenging—and it will show whether Europe is truly ready to drive into the future independently, sustainably, and innovatively.