EU's own rules are strangling its auto industry

The European automotive sector is grappling with internal challenges that threaten its competitiveness, according to industry leaders. Sigrid de Vries, Director General of ACEA, stated in Brussels that the development of European battery powertrains is progressing too slowly. She called for a political shift from the European Commission to accelerate the transition.

Mike Hawes, CEO of the UK's Society of Motor Manufacturers and Traders (SMMT), echoed these concerns. He noted that battery supply chains are still unable to meet stringent "Made in Europe" requirements. These requirements, he argued, were based on assumptions that have not materialized despite significant investment. Hawes stressed the need for pragmatic solutions to avoid "self-defeating tariffs" on vehicles consumers are being encouraged to buy, while also protecting domestic battery manufacturing investments.

Both industry figures highlighted the increasing pressure on the sector from geopolitical tensions and the EU's "Made in Europe" strategy. Hawes suggested that a long-term, bilateral agreement between the EU and the UK is necessary to preserve European automotive cooperation and competitiveness. He warned that Brussels appears indifferent to the struggles of the European car industry.

A European Commission spokesperson indicated that these issues could be discussed within ongoing EU-UK negotiations. The Commission stated it is in continuous contact with electric vehicle industry players to assess their readiness for origin rules. These industry warnings align with broader anxieties about Chinese overproduction and favorable exchange rates potentially triggering crises in Europe's manufacturing sector and leading to its decline.

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We need to find a pragmatic solution that avoids self-defeating tariffs on vehicles that consumers are being encouraged to buy, while protecting domestic battery manufacturing investments.