EU Proposes Industrial Accelerator Act with Local Content Rules, Hitting EV Sector Hard

The European Commission has released a draft of the "Industrial Accelerator Act," proposing to introduce a "Made in the EU" requirement in public procurement and fiscal support programs. According to the draft, starting six months after the Act enters into force, automotive products seeking EU public procurement contracts or government subsidies must be assembled within the EU, and—excluding traction batteries—70% of the vehicle’s component costs must originate from within the EU. Additionally, the three core components of traction batteries must also be produced in the EU. These local content requirements will be further increased three years after implementation. On June 19, the China Chamber of Commerce to the EU submitted formal feedback on the draft, along with specific recommendations for amendments. If enacted, this legislation would directly impact Chinese companies’ exports to and investments in Europe in the electric vehicle and battery sectors.