European automotive suppliers and producers hold differing opinions about Brussels' "Made in Europe" initiative, which aims to protect the European market from Chinese competition.
The European automotive sector is encountering intense rivalry from Chinese manufacturers, putting millions of jobs within the union at risk. In response, the EU is developing what is known as the Industrial Acceleration Act, aimed at promoting electric vehicles predominantly made using European parts through government contracts and financial assistance programs.
Nevertheless, automotive suppliers and makers within the EU differ in their opinions about the upcoming legislation, now being discussed among EU nations and the European Parliament, which establishes a 70% domestic component requirement for electric vehicles.
As stated by the European Association of Automotive Suppliers (CLEPA), the Commission's suggestion represents progress in the correct direction. According to a report obtained by Euronews from management consulting firm Roland Berger, plug-in hybrid electric vehicles and battery-powered cars produced in Europe currently have between 80% and 90% locally sourced parts.
Therefore, it views the Commission's 70 percent benchmark as attainable.
However, the European Automobile Manufacturers' Association (ACEA) is advocating for an alternative approach, where authorities would evaluate completed vehicles rather than the locally sourced parts within them.
"A car represents much more than just its individual components. Its worth is also derived from research and development, cutting-edge engineering, and the expertise of its dedicated team," stated ACEA in a policy document released on July 1st.
CLEPA stated that according to this approach, a completed vehicle would need just 50 percent European-manufactured parts and components, with the rest 20 percent originating from research, development, and other processes.
A 20 percentage-point reduction in the mandate for EU-produced components "might lead to the loss of 350,000 jobs," CLEPA cautioned, adding that the Commission's method focused on individual components would "protect the current production infrastructure."
"Currently, we're witnessing strong competition from low-cost nations, and the major issue everyone is aware of is China," said Benjamin Krieger, Secretary General of CLEPA, during an interview with Euronews.
“A 'Made in Europe' limit that overlooks where the real components are manufactured is a designation that disregards the European employee," he stated.
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