Key facts
- Volkswagen, Stellantis, and Renault are urging the EU to implement a 'Made in Europe' rule.
- The proposed rule requires 70% of a vehicle's value to originate from within the 27-country bloc.
Volkswagen, Stellantis, and Renault urged the EU to adopt a simple 'Made in Europe' rule, requiring 70% of a vehicle's value to originate from the bloc to boost local production amid competitiveness challenges.
The proposal by Europe's leading automakers could significantly shape the future of automotive manufacturing and supply chains within the EU, potentially impacting global trade dynamics and the cost of electric vehicles for consumers.
European automakers Volkswagen, Stellantis, and Renault, which collectively represent approximately 60% of the region's car production, are advocating for a straightforward 'Made in Europe' regulation and enhanced incentives to bolster local manufacturing.
In a joint letter addressed to members of the European Parliament, the three automotive giants proposed that 70% of a vehicle's value should be sourced from within the 27-member European Union, encompassing the entire value chain from engineering to final assembly. This initiative aligns with the EU's ongoing efforts to develop a comprehensive industrial policy, particularly during the transition to electric vehicles, which includes examining local content thresholds and incentives tied to regional production to reduce import dependency.
The manufacturers expressed their commitment to maintaining a robust manufacturing presence in Europe, contingent upon a more adaptable regulatory environment. They highlighted that European automakers face substantial competitiveness challenges due to significant technological disparities in key areas, intense global competition, and persistently high operational costs for energy, manufacturing, and regulatory compliance. This call builds upon previous proposals by Volkswagen and Stellantis for the EU to support its auto industry through favorable treatment and incentives for locally produced electric vehicles.
The companies noted that demand in the European market remains subdued, with annual sales around 3 million vehicles lower than in 2019, underscoring the necessity of policy support. They specifically requested measures to promote European-based manufacturing, including targeted assistance for battery production and greater regulatory flexibility, especially for smaller, more affordable electric car models, to support local supply chains and make EVs more accessible to the middle class. The automakers emphasized that their aim is not to isolate the European market but to prevent further industrial production from being outsourced to third countries, pointing out that imports currently constitute 26% of the EU car market.