The European Commission has delayed the unveiling of a key industrial policy proposal aimed at bolstering the continent’s automotive industry against competition from China, pushing the launch date back to March 4th. Originally slated for release on February 26th, the “Industrial Accelerator Act” (IAA) is now expected to be presented next week, according to EU Internal Market Commissioner Stéphane Séjourné.
The IAA seeks to establish minimum thresholds for locally-sourced components in projects receiving public funding within strategic sectors, including batteries, solar, wind and nuclear energy. The initiative forms part of the EU’s broader Clean Industrial Deal, launched in February 2023, designed to enhance the bloc’s competitiveness in the face of challenges from the United States and China.
A Commission spokesperson told Reuters, “We hope that this additional week of internal discussions will allow us to make the proposal even more robust.” According to a report by the EU news portal Euractiv on February 24th, the Commission intends to publish the proposal before a European Council meeting scheduled for March 19th.
Details emerging from a February report in the Financial Times suggest the IAA will mandate that new electric vehicles, hybrids, and fuel cell vehicles benefiting from state purchase incentives or procured by public authorities must be assembled within the EU. At least 70 percent of their components, excluding the battery, must originate from the EU by value. Crucially, key elements of the battery itself, including the cells, are also expected to be sourced from within the bloc.
This proposed emphasis on local content presents challenges for European automakers currently reliant on battery packs from Chinese and South Korean suppliers. Whereas several manufacturers have begun establishing their own battery production facilities within the EU, recent developments indicate potential setbacks. A joint venture between Stellantis and Mercedes-Benz, Automotive Cells Company (ACC), recently scaled back plans for the construction of three battery cell “gigafactories” in Europe.
The draft legislation also reportedly includes a “supercredit” system, whereby smaller electric vehicles meeting the “Made in Europe” criteria would be given a weighting of 1.3 when calculating compliance with emissions regulations.
The proposal has sparked political divisions. France reportedly supports the “Made in Europe” rules, arguing for the need to protect European industries from cheaper imports from markets like China, where environmental and labor standards are perceived as less stringent. However, countries such as Sweden and the Czech Republic have cautioned that local sourcing requirements could deter investment, increase prices in public tenders, and weaken the EU’s overall global competitiveness.
Within the automotive industry itself, opinions are divided. BMW Group CEO Ola Källenius stated in February that there is “no unified position in the industry.” He noted that globally-oriented manufacturers like BMW and the Volkswagen Group logically favor open trade and oppose protectionism, while regional manufacturers might support protectionist measures. “I can understand that. I get that,” Källenius said.
In 2022, China accounted for 21% of the total EU domestic value added of the automotive industry, making it the largest consumer of EU vehicle products, according to Eurostat data released in December 2025. This represents a 54% increase from 2010, but a 7% decline from 2015.
