EU Proposes 70% Local Content Rule to Boost "Made-in-Europe" EVs

The European Commission is advancing its "Made in Europe" strategy and plans to prioritize support for electric vehicles (EVs) predominantly built with European components through the proposed Industrial Acceleration Act, aiming to counter competition from Chinese companies. Current discussions include a proposal requiring EVs to contain at least 70% local content. The European Association of Automotive Suppliers (CLEPA) expressed support for this approach, stating that plug-in hybrid and battery-electric vehicles produced in Europe already incorporate 80% to 90% European-made components, making the 70% target feasible. Meanwhile, the European Automobile Manufacturers' Association (ACEA), which represents vehicle manufacturers, has proposed an alternative calculation method. ACEA argues that localization levels should be assessed based on the overall European value added to a vehicle—not solely on the origin of its parts. In a position paper released on July 1, ACEA emphasized that a vehicle’s value stems not only from its components but also from investments in research and development, advanced engineering, and highly skilled labor. In response, CLEPA warned that adopting ACEA’s methodology would effectively dilute the localization requirement by approximately 20 percentage points, potentially leading to the loss of 350,000 jobs. Benjamin Krieger, Secretary General of CLEPA, stressed that, given competition from low-cost countries—particularly China—the origin of component manufacturing should remain the benchmark to safeguard the interests of European workers.