Automotive News Europe — 2026-02-25
Automotive Industry
An EU proposal that could protect Europe’s auto industry from Chinese competition, including rules that could require 70 percent of an electric vehicle’s value to be made in Europe to qualify for incentives, has been delayed until March because of disagreements over its geographic scope.
The proposal, the Industrial Accelerator Act, or IAA, was to be released Feb. 26. But Stephane Sejourne, the EU’s internal markets commissioner, said on Feb. 23 that it would be presented March 4.
The measures would set minimum thresholds for locally made parts in projects using public funds in strategic sectors including batteries, solar and wind energy and nuclear power.
The IAA is part of the commission’s Clean Industrial Deal, adopted in February last year to boost the bloc’s global competitiveness, particularly with U.S. and Chinese rivals.
“We hope that this additional week of internal discussions will allow [us] to make the proposal even more rock solid,” a commission spokesperson told Reuters.
A report Feb. 24 on the EU news site Euractiv said the commission hoped to release the proposal ahead of a European Council meeting March 19.
According to a report in February in the Financial Times, new EVs, hybrids and hydrogen fuel-cell cars that benefit from government purchase incentives, or those that are owned or leased by public bodies, must be assembled in the EU and at least 70 percent of their components, with the exception of the battery, must originate in the bloc, as measured by price.
The Times reported that the proposal also says that several main components of the battery need to be of EU origin, including the battery cells. Most EU automakers rely on Chinese and South Korean suppliers for their battery packs, although several have set up factories in the EU. A joint battery venture of Stellantis and Mercedes-Benz, ACC, recently scaled back its ambitions to build three gigafactories in the EU.
It also would provide supercredits worth 1.3 vehicles for small EVs that meet made-in-Europe requirements, according to the report.
Governments split over ‘made in Europe’ rules
Governments including France have been championing the idea of “made in Europe” regulations, arguing that European industries need protection in the face of cheaper imports from markets, including China, with looser environmental and other regulations.
But others, including Sweden and the Czech Republic, warn that “buy local” requirements could deter investment, raise prices in government tenders and hurt the EU’s competitiveness globally.
Automakers and other industries have called for the protections to be extended beyond the EU and EFTA countries (Iceland, Norway, Switzerland and Liechtenstein) to include other territories in their supply chains including Britain and Turkey.
The auto sector is also not united on made-in-Europe rules.
“There is no one single position across the industry,” Mercedes CEO Ola Källenius, who is also president of the ACEA lobbying group, said Feb. 12.
For automakers with a global market presence such as Mercedes, BMW or Volkswagen Group, “it’s quite logical that you are in favor of open trade and open markets and against protectionism,” he said.
On the other hand, Källenius said, a regional manufacturer might favor protectionist measures. “I can relate to that; I understand it,” he said.