Volkswagen, Stellantis and Renault push EU for '70:70' local content rule to counter Chinese imports

The proposal

Volkswagen, Stellantis and Renault sent a joint letter to members of the European Parliament on June 12 calling for a straightforward “Made in Europe” framework. The three groups, which together account for around 60 per cent of Europe’s car output, proposed a simple threshold: 70 per cent of vehicles sold by automakers in the EU must derive 70 per cent of their value from the 27-country bloc, covering engineering through manufacturing. The letter, first reported by the Financial Times and obtained by Reuters, labels the target “70:70 in EU27”. The carmakers argue that the current import share of 26 per cent shows that a rule is needed to halt the further outsourcing of industrial production.

We want to offer clean, affordable, technologically cutting-edge cars to Europe’s middle class.

What the three groups want

Beyond the content threshold, the automakers demand that the Made in Europe label actively incentivise localisation and reshoring rather than merely compensating costs. They seek targeted support for European battery production and “pragmatic flexibility” for small cars to make electric vehicles more accessible while building a resilient European supply chain. The firms stressed that compliance must be simple.

Pressure from Chinese competition and weak demand

The letter frames the industry’s challenge as unprecedented, citing significant technology gaps in strategic areas, intense global competitive pressure and persistently high energy, manufacturing and regulatory costs. Car sales in Europe remain about 3 million units below 2019 levels annually, despite a 4.8 per cent rise in new registrations during the first four months of 2026. Chinese automakers have gained ground with affordable electric and plug-in hybrid models, leveraging advantages in battery technology, raw materials and labour costs.

EU’s existing plans and pushback

The European Union has been exploring a Made in Europe framework for some time, with current proposals requiring fleet cars and small EVs to be assembled in the region to qualify for public procurement and subsidies, and a 70 per cent local content threshold for auto components (batteries excluded). Late last year, an Industrial Accelerator Law was proposed to strengthen Europe’s industrial competitiveness. Volkswagen and Stellantis had endorsed that move but spent months negotiating to bring other carmakers on board; Renault has now added its weight. Non-European manufacturers including Toyota, Jaguar Land Rover and Honda have criticised the geographical scope, warning that excluding components made in the UK, Japan and Turkey would raise compliance costs and push up prices for consumers.

If we do it right

The groups expressed cautious optimism in their joint statement.

If we get it right, Europe can remain a global automotive power.

They insisted that the framework must recognise the cost gap relative to global competitors and that rules should be simple to implement and easy to control. The push represents the latest escalation in European automakers’ effort to secure policy cover against Chinese advances.