Automakers collectively exert pressure! The EU delays the release of the "70% European Manufacturing" regulation, BMW angrily criticizes this as "extremely dangerous"

In response to the collective warning from automotive manufacturing giants about the risks of supply chain disruptions, the European Union has postponed the release of stringent new localization procurement regulations for key industrial products originally scheduled for this week, but this has sparked serious divisions among member states and businesses.

According to previous reports from Wall Street Watch, media reports indicate that the EU plans to introduce the "Industrial Acceleration Act," which requires that key products (such as automobiles and batteries) meet a maximum of 70% "European manufacturing" local content standard. This policy will be implemented through government subsidies and public procurement incentives. EU Commission officials stated that the local procurement rules may still be adjusted before the official announcement on January 28.

Automakers have warned that complex local procurement rules could disrupt supply chains and slow down the transition to electric vehicles, while parts suppliers and new energy companies support the new regulations. BMW CEO Oliver Zipse stated that setting complex local procurement rules is "extremely dangerous," as the calculation process is "extremely cumbersome," and Europe may be "excluded from the global innovation race" as a result.

The policy has sparked intense controversy within the EU and the industry. France is the biggest supporter of the local procurement strategy, but there are differences among member states and businesses regarding the design and implementation of the rules. The industry is concerned that this policy could increase costs for businesses by more than €10 billion annually, weakening market competitiveness.

Automakers lash out: This is stifling innovation

Automakers are the main force behind the opposition, arguing that overly strict geographical restrictions will harm their global operational efficiency. BMW CEO Oliver Zipse bluntly stated that setting complex local procurement rules is "extremely dangerous," as the related calculation process will be "extremely cumbersome." He warned that this approach could lead to Europe being excluded from the "global innovation race," thereby weakening the local industry's technological iteration capabilities.

In addition to European automakers, Japanese automakers operating in Europe have also expressed strong concerns, believing that "European manufacturing" could exclude even friendly trading partners. Honda Motor Europe's President Katsuhisa Okuda warned that overly strict procurement requirements could bring "unintended consequences," thereby slowing down Europe's transition to clean mobility. He called for the establishment of a framework based on "manufacturing with shared values," which should consider trade liberalization, market economic status, and the synergy of political and economic values, rather than purely geographical restrictions.

Furthermore, manufacturers, including several EU-based automakers, hope to include countries like the UK and Turkey, which have large manufacturing centers, in the calculation threshold for local content to avoid supply chain disruptions.

The reverse game of supply chains and the energy industry

In stark contrast to the stance of automakers wishing to keep supply chains open, parts suppliers and some renewable energy companies believe that localization mandates are a matter of survival. Given the dual advantages of external competitors in technology and pricing, European suppliers not only struggle under strict climate regulations and high energy costs but also face fierce competition from imported products Benjamin Krieger, Secretary General of CLEPA representing automotive parts suppliers, believes that the EU cannot sit idly by and must quickly introduce new regulations that will help "protect jobs and reduce dependence on imports until deeper reforms take effect."

Voices of support have also emerged from the renewable energy sector, which hopes to prevent dumping and gain investment certainty through clear domestic procurement requirements. Constantine Levoyannis, Head of Government Affairs at Norway's Nel Hydrogen, pointed out that the clean technology sector has previously faced serious external supply surpluses and dumping issues, so the industry welcomes setting a higher European content ratio at the component level. Ilka von Dalwigk, Director General of Recharge Europe, the battery supply chain representative organization, also added that as many projects have been delayed or canceled, domestic procurement requirements will provide the necessary "investment certainty," but she also emphasized that these rules should be part of a broader industrial strategy that includes incentives.

Policy Swings and Competitive Reality

Despite the varying demands from different industries, the core controversy still lies in Europe's own industrial competitiveness. Walburga Hemetsberger, CEO of SolarPower Europe, suggested incorporating domestic content requirements into the public procurement system to drive the industry through government demand.

However, Fatih Birol, Executive Director of the International Energy Agency (IEA), takes a cautious stance on this. He pointed out that Europe needs to find a balance between promoting domestic procurement and acknowledging reality, namely the objective fact that Europe currently struggles to compete in certain technological fields.

Birol emphasized:

"Europe should focus on areas where it is genuinely competitive."

This viewpoint echoes the opinions of some industry observers: in the absence of sufficient price competitiveness, mandatory localization quotas may become an expensive form of protectionism rather than a true industry accelerator