EU Proposes "Made-in-EU" Car Rules Amid Mounting Controversy

The European Union plans to unveil its "Made in EU" automotive rules on March 4, requiring that 70% of the cost of electric vehicle components originate within the EU to bolster domestic industry and counter competition from Chinese EVs. However, the policy has drawn widespread criticism: France and Germany hold starkly divergent positions, with France backing protectionist measures while Germany fears retaliatory trade actions. Automakers such as Ford and Jaguar Land Rover strongly oppose the rules due to their reliance on non-EU supply chains, particularly from the UK and Turkey. Analyses indicate that some models, like the Volkswagen ID.3, already meet the threshold, while the Renault 5 barely complies—only after excluding battery costs. The new rules exclude key partners like the UK and Turkey from the definition of “domestic,” prompting strong concerns from these countries. Additionally, China may respond with countermeasures, viewing the regulation as implicitly protectionist. Against the backdrop of deeply integrated global supply chains, the EU’s ability to strike a balance between protecting its own industry and maintaining international cooperation will be crucial to the policy’s success.