0:00
0:00
European Commission Plans Purchase Incentives Limited to Vehicles Manufactured Largely in the EU
Proposed industry support law would restrict subsidies and public tenders to vehicles assembled in Europe with at least 70 percent of components produced locally
The European Commission is preparing legislation that would limit purchase incentives and access to public tenders to vehicles largely manufactured within the European Union, in a move aimed at supporting the bloc’s automotive industry amid growing competition from Chinese manufacturers.
Under the proposed industry support law, expected to be published in March, electric vehicles, plug-in hybrids and hydrogen fuel cell vehicles would qualify for incentives and participation in public procurement only if they meet two conditions: the vehicle must be assembled at a production facility within the European Union, and at least 70 percent of its components by value, excluding the battery, must be manufactured in Europe.
The initiative follows increasing pressure on European carmakers, who have struggled to compete with lower-priced Chinese models entering the European market.
European officials state that the measure is intended to protect millions of jobs within the automotive sector.
Several Chinese manufacturers have already established or are planning production facilities within the EU, partly to avoid potential trade restrictions.
BYD has opened a factory in Hungary.
Chery has established a plant in Spain and is seeking to acquire two Volkswagen facilities in Germany.
Changan has announced plans to build its own factory in Europe.
Dongfeng is seeking to open a plant in Italy.
Leapmotor plans to use a Stellantis facility in Spain.
SAIC and Great Wall are also searching for factory sites in Spain, Poland and other locations.
Major European manufacturers including Volkswagen and Stellantis, which owns brands such as Peugeot, Citroën, Opel and Jeep, support the proposal.
Suppliers of automotive components and green technology also view the measure as a growth opportunity.
Other manufacturers, including BMW, have warned that the plan could increase costs and create additional bureaucratic complexity.
European law allows the Commission to introduce industry measures at the bloc level, and the proposed framework would apply across member states once adopted.
The draft legislation has not yet been formally enacted.
Under the proposed industry support law, expected to be published in March, electric vehicles, plug-in hybrids and hydrogen fuel cell vehicles would qualify for incentives and participation in public procurement only if they meet two conditions: the vehicle must be assembled at a production facility within the European Union, and at least 70 percent of its components by value, excluding the battery, must be manufactured in Europe.
The initiative follows increasing pressure on European carmakers, who have struggled to compete with lower-priced Chinese models entering the European market.
European officials state that the measure is intended to protect millions of jobs within the automotive sector.
Several Chinese manufacturers have already established or are planning production facilities within the EU, partly to avoid potential trade restrictions.
BYD has opened a factory in Hungary.
Chery has established a plant in Spain and is seeking to acquire two Volkswagen facilities in Germany.
Changan has announced plans to build its own factory in Europe.
Dongfeng is seeking to open a plant in Italy.
Leapmotor plans to use a Stellantis facility in Spain.
SAIC and Great Wall are also searching for factory sites in Spain, Poland and other locations.
Major European manufacturers including Volkswagen and Stellantis, which owns brands such as Peugeot, Citroën, Opel and Jeep, support the proposal.
Suppliers of automotive components and green technology also view the measure as a growth opportunity.
Other manufacturers, including BMW, have warned that the plan could increase costs and create additional bureaucratic complexity.
European law allows the Commission to introduce industry measures at the bloc level, and the proposed framework would apply across member states once adopted.
The draft legislation has not yet been formally enacted.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
