EU Proposes "Made in Europe" Rules, Threatening UK Cars' Access to European Market

The Society of Motor Manufacturers and Traders (SMMT) has warned that the European Union is preparing a protectionist policy called the "Industrial Accelerator Act," which would offer subsidies exclusively to "Made in Europe" vehicles and require corporate fleets to purchase a certain proportion of cars manufactured within the EU. Aimed at countering competition from Chinese automakers, the move would severely impact UK car exports—57% of which currently go to the EU. SMMT Chief Executive Mike Hawes stated that the policy could violate the post-Brexit UK-EU Free Trade Agreement, making it harder for UK-built vehicles to access the European market. Additionally, stricter rules of origin set to take effect at the end of this year will require a higher proportion of locally sourced components in vehicles; otherwise, they will face tariffs—a development that puts pressure on the UK’s electric vehicle industry, which relies heavily on imported batteries. In 2023, UK car production fell to 765,000 units, the lowest level since the 1950s. The SMMT is urging the EU to ensure the UK remains an integral part of the European automotive supply chain.