This article explores China’s growing geoeconomic leverage in the global electric vehicle (EV) and battery supply chain, examining its implications for the European Union’s industrial strategic autonomy while advancing its ambitious green transition. Applying the framework of Blackwill & Harris (2016), it analyzes three core drivers of China’s leverage: centrality in global supply chains, monopoly over key technologies and raw materials, and monopsony power as a dominant buyer and processor. China’s dominance is underpinned by its control of critical minerals, vast manufacturing capacity, and technological innovation, particularly in lithium-iron-phosphate (LFP) battery technology. This paper then examines the EU’s response through tariffs, industrial policies, and diversification efforts under its “de-risking” strategy. However, this paper argues that these measures are insufficient to resolve Europe’s structural dependencies on Chinese imports. Challenges such as slow domestic capacity development, higher production costs, fragmented political consensus, and regulatory constraints hinder the EU’s ability to reshape the status quo. The article concludes that while China’s leverage can act as both a tool of cooperation and coercion, the EU must urgently scale domestic production, incentivize critical raw material investments, and strengthen regulatory coherence to safeguard industrial competitiveness and climate goals. Without deeper structural reforms and greater strategic unity, the EU remains vulnerable to external pressures in the rapidly evolving green economy.