KATHMANDU: The European Union is set to propose new “Made in EU” rules for electric vehicles, but the plan could trigger retaliation from key trading partners, according to Reuters.
Under the draft Industrial Accelerator Act, EVs would need at least 70 percent of the cost of their parts manufactured within the EU to qualify for subsidies. The proposal also sets minimum EU-based content for battery packs, while excluding battery cells due to China’s dominance in global cell production.
The plan has exposed divisions within the bloc. France supports stricter local-content rules to protect domestic suppliers, while Germany fears potential retaliation, particularly from China, where German automakers sell more than a quarter of their vehicles.
Automakers such as Ford Motor Company and Jaguar Land Rover have major operations in non-EU countries that could be affected. Britain, Turkey, and Morocco are also lobbying to avoid exclusion from the new framework.
French supplier Valeo warned that without stronger industrial measures, Europe risks further production relocation. At the same time, Germany’s VDA auto lobby cautioned that strict local-content requirements could be viewed as protectionist.
Reuters noted that global automotive supply chains are highly integrated, making it difficult to accurately determine local content in each model. The EU now faces the challenge of supporting its auto industry without escalating trade tensions.
