The new rules, part of the proposed Industrial Accelerator Act (IAA), would require cars to be "made in Europe" with sufficient European parts and materials to qualify for EV grants and public procurement. If Brussels defines "European" strictly as the EU's 27 member states, Britain risks exclusion, prompting intense lobbying from UK industry and government.
Emanuele Cappellano, who leads Stellantis's European brands including Fiat, Citroën, Opel and Vauxhall, and François Provost, the chief executive of Renault, said the UK should effectively be counted as one of the 27 member states for the purposes of the legislation. "I think that UK somehow needs to be equalised to the EU 27," said Cappellano. "We have a lot of relationship, we have footprint. Historically UK has been very close to the European market."
Stellantis still operates a British factory in Ellesmere Port, Merseyside, producing small vans. Europe's main automotive lobby groups, ACEA and Clepa, have also backed UK inclusion.
The EU confirmed on Monday it would limit hybrid electric vehicle imports from China to 350,000 cars a year from December, expecting the quota to halve China's current 6% market share as part of a four-year agreement reached in Beijing last week.
The Paris motor show saw a strong presence from Chinese manufacturers including Li Auto, GAC and Chery, with ambitious European expansion plans. European carmakers are under pressure from lower post-pandemic demand and massive investment in EV production, while Chinese competitors have gained market share in the EV transition.
Details of the Made in Europe rules remain under negotiation, with manufacturers and politicians haggling over the definition of "European" content.
Why This Matters
- The outcome will determine whether UK-made cars qualify for EU subsidies and government contracts, affecting jobs and investment at British factories.
- The decision could reshape EU-UK trade relations post-Brexit, with implications for other UK industries seeking access to EU markets.
- The broader EU response to Chinese auto imports sets a precedent for how Europe protects its manufacturing base during the EV transition.
Background
The EU's "Made in Europe" legislation is part of a wider push to ensure subsidies and public procurement benefit European industry rather than competitors, particularly Chinese manufacturers. The bloc has already agreed to cap Chinese hybrid EV imports at 350,000 per year. Europe's car industry is investing heavily in shifting to electric vehicles while facing lower demand than before the pandemic. The UK, which left the EU in 2020, has been seeking inclusion in the new rules as it retains automotive production and close supply chain links.
Key Perspectives
Stellantis and Renault: Want the UK treated as equivalent to EU member states to protect their cross-border operations and UK factories, while urging Britain to join Europe in limiting Chinese imports. European manufacturers and lobby groups: ACEA and Clepa support UK inclusion, arguing the UK's integrated supply chains make exclusion impractical and damaging. EU policymakers and protectionist voices: Some EU member states and industry players favour a strict EU-only definition, arguing the rules are meant to protect the bloc, not non-members. The final shape of the IAA is still being negotiated.
What to Watch
- The final definition of "European" content in the Industrial Accelerator Act, expected in coming months.
- The UK government's response to calls to limit Chinese car imports, and whether it aligns with EU quotas.
- The December implementation of the EU's hybrid vehicle import quota from China and its effect on market shares.