High-road or low-road? Europe’s EV battery rollout and the tradeoffs of green industrial policy in a geoeconomic world

Abstract

The global expansion of clean-tech investment is widely framed as a triple win for decarbonization, industrial renewal, and geopolitical resilience. Yet on the ground, outcomes diverge sharply. While some projects generate clean production and domestic capacity-building, others produce environmentally harmful, low value-added enclaves that deepen dependency and provoke backlash. This article examines how such divergent outcomes emerge in the European Union’s (EU) electric vehicle (EV) battery rollout. It develops a typology of minimalist and maximalist paths to compare how countries navigate three core tradeoffs in green industrial policy: fast clean-tech rollout versus sustainable production; foreign-led expansion versus domestic capabilities; and physical localization versus geopolitical resilience. The analysis draws on a novel project-level dataset of planned and operational gigafactories and a comparative analysis of five EU member states: Hungary, Poland, Germany, France, and Sweden. Findings show that shallow compliance dominates across much of the bloc–driven by fragmented EU governance structures that fail to enforce coherence. Read more broadly, the EU case illustrates latecomers’ challenges in hosting clean-tech investment without entrenching dependency under Chinese technological dominance and intense geoeconomic competition. Europe’s internal divisions undermine its ability to respond strategically and secure a favorable position in an emerging global ‘green division of labor’.