The Industrial Accelerator Act is set to change the rules for the automotive industry

With the planned Industrial Accelerator Act (IAA), the EU is reshaping the rules of the automotive sector. Without meaningful European value creation, access to subsidies will be limited. Public purchase incentives and tax benefits however are key factors in EV adoption.

As a recent Rhodium Group analysis shows, Chinese manufacturers in particular are likely to be affected. What matters in the future is no longer whether cars are assembled in Europe, but whether key components such as battery cells and drivetrains are produced there. 

These stricter local content rules are at the core of the IAA. For Chinese manufacturers, this poses a significant challenge, as their competitiveness has so far relied heavily on producing most components in China.

The impact will be especially visible in the market of corporate fleets, which accounts for the majority of new car registrations. Here, subsidies are expected to be limited to “Made in EU” vehicles only.

#EU #Automotive #IndustrialPolicy #Electromobility

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