Key facts
- European car suppliers and manufacturers are divided over the EU's 'Made in Europe' strategy.
- The strategy aims to protect the EU market from Chinese competition by favoring electric vehicles with European components.
- A proposed 70 percent local content threshold for electric vehicles is at the center of the dispute.
- Suppliers (CLEPA) believe the threshold is achievable and necessary to protect jobs.
- Manufacturers (ACEA) prefer a methodology that assesses finished vehicles, which suppliers argue would reduce the required EU content.
The European Union's automotive industry is grappling with intense competition from Chinese manufacturers, prompting the European Commission to develop a 'Made in Europe' strategy. This initiative, part of the proposed Industrial Accelerator Act, aims to bolster the local industry by favoring electric vehicles constructed with a significant percentage of European components in public procurement and support schemes.
However, a deep division has emerged between European car suppliers and manufacturers regarding the proposed 70 percent local content threshold for electric vehicles. The European Association of Automotive Suppliers (CLEPA) views the Commission's proposal favorably, citing a study indicating that current European-made plug-in hybrid and battery-electric vehicles already contain between 80 percent and 90 percent European components, making the 70 percent target achievable. CLEPA emphasizes that this component-level approach is crucial for safeguarding the existing manufacturing base and protecting European jobs.
Conversely, the European Automobile Manufacturers' Association (ACEA) is pushing for an alternative assessment methodology. ACEA argues that regulators should evaluate the finished vehicle, taking into account research and development, advanced engineering, and skilled labor, rather than solely focusing on component content. CLEPA has countered that ACEA's proposed method could dilute the requirement for EU-made parts to as low as 50 percent, with the remaining 20 percent attributed to non-component activities. CLEPA warns that such a dilution could jeopardize approximately 350,000 jobs, with Secretary General Benjamin Krieger stating that a 'Made in Europe' label ignoring the origin of parts disregards European workers.