ACEA: The Industrial Accelerator Act Must Strengthen, Not Weaken, Europe's Automotive Industry

ACEA: The Industrial Accelerator Act must strengthen, not weaken, the European automotive industry

Europe's automotive industry recognizes the full complexity of the current geopolitical and economic environment. Once again, Sigrid de Vries, Director General of ACEA (the European Automobile Manufacturers' Association), has publicly explained why ACEA has issued a new statement ahead of the adoption of the Industrial Accelerator Act.

"Europe's automotive industry is investing billions to achieve the transition to zero-emission mobility while navigating an increasingly challenging economic, competitive and geopolitical environment," said Sigrid de Vries.

"The Industrial Accelerator Act represents an important opportunity to strengthen Europe's industrial base. We support its objectives, but the proposal must also reflect the reality our sector is facing if it is to achieve its full potential.

ACEA is putting forward practical recommendations that will help ensure the Act becomes a genuine catalyst for industrial strength, embedded within a broader and more coherent European industrial policy. I look forward to continuing the dialogue with policymakers as negotiations progress."

The ACEA statement, provided to the Serbian Association of Vehicle and Parts Importers, is reproduced below in full:

THE AUTOMOTIVE INDUSTRY'S POSITION ON THE INDUSTRIAL ACCELERATOR ACT

Europe's automotive industry supports the objective of the Industrial Accelerator Act: to protect manufacturing in the European Union and reduce Europe's dependence on other regions for clean technologies. The risk of Europe's industrial base being eroded is real, and smart, targeted measures to support domestic manufacturing are justified. However, the scale of the challenges facing our sector must not be underestimated. As currently drafted, the proposal risks disrupting established value chains and undermining a wide range of existing investments. We therefore need a pragmatic implementation plan—one that strengthens, rather than weakens, the EU's industrial base and protects existing investments and jobs instead of putting them at risk. Only then will the Industrial Accelerator Act become an effective industrial policy tool.

Our industry is already undergoing a profound transformation towards zero-emission mobility, while facing intense global competition, rising production costs and weakening consumer demand across Europe. A move towards an explicit "EU27 preference" is legitimate, but it must be gradual and include justified, targeted exemptions. Excluding existing manufacturing facilities operated by ACEA members, for example, would block European investments and weaken our competitiveness at the worst possible moment.

To ensure a workable framework, we call on legislators to address the following issues:

• Create sustainable incentives to reward localisation. Requirements for local vehicle assembly and component sourcing will increase vehicle production costs. Without adequate incentives, the Industrial Accelerator Act risks raising manufacturing costs in Europe without improving the business case for domestic production. These requirements should therefore be accompanied by measures that significantly offset the additional costs, such as super-credits for battery-electric passenger cars and vans under the CO₂ Regulation, or direct financial support schemes for public authorities to compensate for the additional costs associated with procuring EU-manufactured trucks and buses.
• Measure the European content of the finished vehicle, not only its components. The currently proposed methodology calculates "Made in Europe" content solely on the basis of components. This overlooks the significant value created by vehicle manufacturing itself. A vehicle is much more than the sum of its parts. Its value also lies in research and development, advanced engineering and the highly skilled workforce behind it. Instead, the calculation should start from the full value of the completed vehicle and deduct only the value originating outside Europe. This better reflects Europe's true contribution and follows the methodology already established in EU free trade agreements, providing manufacturers with a proven and reliable approach.
• Recognise the United Kingdom as an equal partner within the "Made in Europe" framework. The European automotive industry operates through deeply integrated value chains with the United Kingdom, even after Brexit. The EU-UK Trade and Cooperation Agreement contains comprehensive level-playing-field provisions that guarantee equivalent standards in competition, labour and environmental protection. Vehicles, components and batteries manufactured in the United Kingdom should enjoy the same status as those produced in the EU27, with equal access to all relevant policy instruments.
• Protect existing investments made by European vehicle manufacturers. All Industrial Accelerator Act policy instruments should recognise the existing operations of ACEA members established in closely integrated neighbouring countries such as Türkiye and Morocco, ensuring that investments made in good faith under the previous regulatory framework are not undermined. To prevent circumvention, this targeted grandfathering should apply only to production capacity established before a fixed cut-off date (for example, the publication of the Industrial Accelerator Act proposal) and should cease to apply if ownership of the operation changes.
• Introduce a simple fleet-level compliance target with a clearly defined geographical scope. If 70% of an OEM's fleet complies with the "Made in Europe" requirements (batteries, components and vehicle assembly) in a given year, then 100% of the fleet should qualify for the associated benefits in the following year. The geographical scope of this fleet-level calculation should be strictly limited to the EU27, the European Economic Area and the United Kingdom, while including the grandfathering provision for existing operations in Türkiye and Morocco. The fleet calculation should also recognise the important economic role of vehicles manufactured in Europe for export markets. Appropriate safeguards may be introduced to prevent business models that could undermine the overall objectives of the Industrial Accelerator Act.
• Apply realistic timelines for battery localisation and remove requirements for low-carbon materials until appropriate definitions are available. The requirement to source electric powertrains and electronic components manufactured in the EU requires further assessment, as the relevant definitions and practical implementation remain unclear. Moreover, this requirement may not be appropriate in situations involving supply chain disruptions that require rapid sourcing changes.
• Significantly simplify reporting obligations. Vehicle manufacturers will bear the burden of identifying and educating potentially thousands of suppliers while assuming ultimate legal responsibility for collecting evidence demonstrating compliance with the "Made in Europe" criteria. Compliance should be straightforward to verify, and reporting requirements should be kept as simple as possible.
• Reflect the real differences between vehicle segments. The current proposal treats passenger cars, vans, trucks and buses identically. In reality, these segments differ significantly in their development cycles and value chains, and the Industrial Accelerator Act should reflect the specific needs of trucks and buses instead of applying a one-size-fits-all approach. For example, it is currently impossible to establish a realistic timeline for mandatory battery localisation in the heavy-duty vehicle segment due to insufficient battery supply. Demand for batteries in this segment alone is expected to exceed the EU's total battery production capacity by 2030. Mandatory use of EU-manufactured battery components under these circumstances would significantly increase battery assembly costs, adding a substantial price premium to truck batteries that subsidies or public procurement schemes would likely be unable to fully offset.

The Industrial Accelerator Act alone will not reverse Europe's declining competitiveness as a manufacturing location. We must continue addressing energy costs, permitting timelines and skills shortages while maintaining sustained capital and operational investment in battery production. Regulatory simplification must remain a central priority. The revision of the EU vehicle type-approval framework, scheduled for next year, provides the right opportunity to reduce unnecessary bureaucracy and streamline regulatory procedures.

Source: ACEA 
Photo: AI