How are Car Manufacturers Meeting Supply Chain Regulations?

Major manufacturers across Europe are preparing for a significant shift in how they manage and share data throughout their supply chains.

With EU regulations mandating digital product passports (DPPs) from 2027, companies including BASF, BMW, CATL, Henkel and Siemens have launched Path.Era, a collaborative system designed to address the complex data-sharing challenges that span global battery supply chains.

Path.Era functions as a digital battery passport (DBP) that collects and manages critical data about batteries throughout their lifecycle.

The system could streamline information sharing between suppliers, manufacturers and other stakeholders across the entire value chain of battery products, addressing a growing need for transparency as regulatory requirements intensify.

The challenge for manufacturers lies in coordinating data collection across multiple tiers of suppliers, many of whom operate in different regulatory environments with varying levels of digital infrastructure. Supply chain partners must now implement systems capable of tracking materials from raw mineral extraction through processing, component manufacturing and final assembly.

The DPP is a structured digital record that provides lifecycle data for each product in a standardised format. It contains essential data such as material composition, carbon footprint, repairability and end-of-life instructions, which are often accessed via a QR code.

Starting in 2027, DPPs will become mandatory for priority product groups in the EU, with full rollout expected by 2030. Sectors affected include batteries, textiles, tyres, furniture, mattresses, chemicals, iron, steel and aluminium, as well as information and communications technology (ICT) and energy-related products. According to Deloitte, luxury fashion and jewellery sectors drive early adoption of DPPs.

Managing complex value chains

DBPs represent a subset of DPPs specifically designed to capture full lifecycle and recycling data for individual batteries. According to the Global Battery Alliance, they are underpinned by indicators that allow data on facility-level sustainability performance in the battery supply chain to be gathered, verified, scored, aggregated and compared.

The 2027 EU regulations will require carmakers producing electric vehicle (EV) batteries to improve supply chain visibility, particularly around lifecycle and recycling data for critical minerals such as lithium, nickel and cobalt. This represents a significant challenge for manufacturers managing complex, multi-tiered supplier networks that often span multiple continents.

The complexity intensifies when considering that a single EV battery contains components from dozens of suppliers across different regions. Tier-one suppliers must collect data from tier-two and tier-three partners, creating a cascading information requirement that extends deep into the supply network.

Many smaller suppliers lack the digital infrastructure to participate effectively in these data-sharing ecosystems, creating potential bottlenecks in compliance efforts.

Oliver Ganser, Vice President of Digitalisation of the Purchasing and Supplier Network at the BMW Group, says: "To collect the relevant data points for a battery pass, we will support our relevant value chain partners with a simple and trusted solution to get the job done. Path.Era and Catena-X are the perfect match to get the job done."

According to McKinsey, battery manufacturers may find new opportunities in recycling as the market matures. Companies could create a closed-loop, domestic supply chain that involves the collection, recycling, reuse or repair of used lithium-ion batteries. The recycling industry alone could create a US$6bn profit pool by 2040.

However, recycling challenges remain substantial. Current processes struggle with the variety of battery chemistries and designs, making standardised recycling difficult.

Supply chains must be redesigned to accommodate reverse logistics, where end-of-life batteries are collected, transported and processed efficiently. The economics of recycling depend heavily on recovered material values, which fluctuate with commodity prices, creating uncertainty for long-term supply chain planning.

Circular economy opportunities extend beyond simple material recovery. Manufacturers are exploring second-life applications for EV batteries in stationary energy storage, requiring new supply chain partnerships and quality assessment processes to determine which batteries are suitable for repurposing versus recycling.

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Streamlining data exchange processes

Path.Era was announced in 2025 as a scalable ecosystem for DBPs, based on Catena-X, a collaborative data ecosystem for the automotive industry. The platform is designed to enable traceability and circularity across the battery value chain. It is available on Cofinity-X, an operator of the Catena-X dataspace.

The ecosystem was co-founded in collaboration with Path.Era's partners, which include BASF, BMW Group, CATL, Henkel, Siemens and Volkswagen Group. The initiative aims to ensure secure and standardised data exchange and reduce manual processes, while meeting legal requirements.

Standardisation across the supply chain is critical for the system's success. Without common data formats and protocols, information exchange between different manufacturers' systems becomes cumbersome and error-prone. Path.Era addresses this by providing a unified framework that all participants can adopt, reducing the integration burden on individual suppliers.

Matthias Dohrn, President of Global Procurement at BASF, says: "Path.Era is our solution to bring transparency into the entire battery value chain and to efficiently fulfil legal and reporting requirements."

BASF's portfolio includes work in the battery recycling value chain, from collecting end-of-life batteries and production scrap, discharging and dismantling. It also offers base metals sourcing and management as well as various other related services.

According to McKinsey, data availability and transparency are fundamental requirements to ensure that the battery industry achieves its growth and environmental, social and governance targets. According to McKinsey, producing the large lithium-ion batteries used to power EVs is the biggest source of embedded emissions for both electric cars and trucks, accounting for about 40 to 60% of total production emissions.

Blueprint for future implementation

The implications of DPPs extend far beyond the battery sector. Companies across manufacturing industries operating in Europe will need to integrate sustainable reporting tools into their supply chain operations to comply with upcoming regulations.

George Kazantis, Vice President of Automotive Components at Henkel, says: "The transparency we create for the battery industry with DBPs is just as relevant for other industries. For us, the Path.Era battery passport is the blueprint for the future of DPPs."

With more intensive recording and accountability, schemes like the DBP which help with data availability may help address critical supply chain transparency challenges. Companies looking to stay ahead of regulatory requirements are already working to integrate these systems across their supplier networks.

The success of these initiatives will depend on widespread adoption across supply chains and the willingness of all participants to invest in the necessary digital infrastructure and process changes.

Early adopters are establishing competitive advantages by building robust data management capabilities ahead of regulatory deadlines. These companies are positioning themselves as preferred partners for organisations seeking compliant supply chain solutions, whilst simultaneously gaining valuable insights into their operations that can drive efficiency improvements and cost reductions beyond mere regulatory compliance.