Brussels is pushing forward with its Industrial Accelerator Act, a legislative package designed to bolster the European automotive sector against the rising tide of Chinese competition. At the heart of the proposal is a requirement that electric vehicles (EVs) receiving public procurement or support must contain at least 70 percent locally sourced components. But the plan has exposed a deep rift between car parts suppliers and vehicle manufacturers over how to define “Made in Europe.”
The European Association of Automotive Suppliers (CLEPA) argues that the 70 percent threshold is not only achievable but already exceeded by most EVs produced in the bloc. A study commissioned by CLEPA from management consultancy Roland Berger found that plug-in hybrid and battery-electric vehicles manufactured in Europe already contain between 80 and 90 percent European components. CLEPA Secretary General Benjamin Krieger told Euronews: “What we are looking at right now is significant competition from best-cost countries, and the dragon in the room is China.”
On the other side, the European Automobile Manufacturers' Association (ACEA) is pushing for a different approach. In a position paper published on 1 July, ACEA argues that regulators should assess finished vehicles rather than the sum of their parts. “A vehicle is far more than the sum of its parts. Its value also lies in the R&D, advanced engineering and highly skilled workforce behind it,” the association stated.
Methodology dispute threatens jobs
CLEPA has warned that ACEA's preferred methodology would effectively dilute the local content requirement to just 50 percent for physical components, with the remaining 20 percent coming from research, design and other intangible activities. According to CLEPA, this “could result in the loss of 350,000 jobs” across the EU, as it would fail to safeguard the existing manufacturing base. The suppliers' group insists that the Commission's component-level approach is the only way to protect the bloc's industrial ecosystem.
The stakes are high. The EU car industry directly and indirectly employs millions of people across the continent, from factories in Wolfsburg and Stuttgart to assembly lines in Bratislava and Barcelona. The rise of Chinese EV makers, backed by state subsidies and aggressive pricing, has already begun to erode market share for European brands. The Industrial Accelerator Act is one of several measures the European Commission is deploying to level the playing field, alongside new customs rules targeting Chinese e-commerce giants and a broader push for strategic autonomy in critical supply chains.
The disagreement comes as the EU also grapples with other challenges, including the need to secure critical raw materials for battery production and to build out charging infrastructure. The debate over local content thresholds is likely to intensify as the European Parliament and member states finalize the legislation in the coming months.
For now, the two industry associations remain at odds. CLEPA sees the 70 percent rule as a baseline that can be tightened over time, while ACEA warns that overly rigid requirements could stifle innovation and raise costs for consumers. The outcome will shape not only the future of the European car industry but also the bloc's broader strategy for competing with China in high-tech manufacturing.
