The European Commission is preparing new regulations aimed at protecting and strengthening the European automotive industry against foreign competition, particularly from Asia. The proposed Industrial Accelerator Act is set to introduce minimum thresholds for the share of components produced in Europe for vehicles funded with public money. The goal is to preserve jobs and the continent's technological sovereignty, with initial estimates suggesting that without such measures, up to 350,000 jobs could be lost by 2030.
Support for Local Production
Planned EU regulations, known as the Industrial Accelerator Act, are set to introduce minimum thresholds for the share of components produced in Europe for strategic sectors, including automotive. This will apply to projects funded with public money, aiming to protect European production capabilities and technological sovereignty.
Thresholds for 'Made in Europe' Components
According to reports, for electric cars, a proposal suggests that 70% of components (excluding batteries) should originate from Europe. The introduction of a concept for vehicles of Union origin is also being considered, strictly defined based on the EU customs code, with restrictive plans for key components like batteries.
Industry and Public Reaction
The automotive industry warns of the loss of hundreds of thousands of jobs and technological capacity without support for local production. At the same time, polls in Germany show strong public support for such regulations – 70% of respondents support a legal obligation for production in the EU for companies using public funds.
Challenges for Subsidies and National Policies
The new EU regulations may force changes to national support programs, such as the German electric vehicle purchase incentive. Currently, many available and affordable electric cars, including European brands, use batteries or are produced in Asia, which puts these programs in potential conflict with future EU law.
Benefits for Poland
Poland, as a key supplier of parts and components for the EU automotive market with exports worth 17.5 billion euros in 2024, could derive significant benefits from the new regulations, which would boost demand for local components. The exact effective date of the regulations is not yet known.
The European Union is preparing a comprehensive overhaul of regulations aimed at strengthening and defending the European automotive industry, especially in the face of competition from Asia. The key tool is expected to be the draft Industrial Accelerator Act (IAA), targeted at sectors of strategic importance, such as battery production, renewable energy, and automotive. The main premise is to link access to public funding or procurement with a minimum share of components manufactured in Europe. For the automotive industry, and particularly for electric vehicles, discussions are underway about a threshold of 70% for parts (excluding batteries). The European automotive industry has been a pillar of the continent's economy for years, but over the last decade, with the dynamic development of electromobility, it has begun losing ground to Asian producers, especially Chinese ones, who have dominated the supply chain for key components such as lithium-ion batteries. The initiative aims to address alarming forecasts. As indicated by the European Association of Automotive Suppliers CLEPA, without effective support mechanisms, Europe could lose up to 350,000 jobs in the automotive sector by 2030, along with part of its technological independence. The new regulations are also intended to protect against unfair competition conditions, such as state subsidies for producers outside the EU. The project introduces a strict definition of Union origin, based on the EU customs code and covering EU countries and the European Economic Area. Detailed plans concern restrictive, gradually tightening requirements for the most expensive component – batteries. The proposed changes carry direct consequences for national policies. As a German article points out, the federal government's planned electric vehicle purchase incentive would conflict with the new EU law, as many currently available, affordable models (even from German brands) use batteries or are assembled in Asia. This necessitates a deep revision of such programs. On the other hand, the initiative enjoys strong public support. A poll conducted for the German trade union IG Metall shows that 70% of Germans support a legal obligation for production in the EU for companies selling on the EU market or using public funds, and as many as 90% want subsidies to be conditional on securing jobs in Europe. For Poland, which does not produce final electric cars but is one of the key parts suppliers for the entire Union, the new regulations could be a significant boost. In 2024, Polish automotive component exports were worth 17.5 billion euros. Strengthening local content requirements would directly translate into increased demand for components manufactured domestically, providing a "strong boost for the industry." The final shape of the regulations and their effective date are not yet known, and the legislative process is still ongoing.