Volkswagen, Stellantis call for 'made-in-Europe' rules in industrial policy overhaul

Volkswagen, Stellantis call for 'made-in-Europe' rules in industrial policy overhaul

EURACTIV — 2026-02-05

News from Brussels

Europe’s two biggest carmakers have urged Brussels to tweak purchase subsidies and public procurement to favour domestic production over imported vehicles, calling for clear labelling and additional incentives for electric cars built in Europe.

In an opinion piece published in national newspapers on Wednesday night, the CEOs of Volkswagen and Stellantis – which together account for about 40% of the EU car market – urged the European Commission to build on incoming domestic production mandates with a full-blown ‘made-in-Europe’ strategy.

Their position appears to be at odds with that of the European Automobile Manufacturers’ Association (ACEA), of which both companies are members, after the lobby group warned that domestic production quotas could complicate European companies’ access to global markets.

ACEA has urged caution over any made-in-Europe preference, likely due to internal divisions. The German premium carmaker BMW, for example, is understood to be against the introduction of local preference criteria.

The lobby group declined to comment for this article.

The strategy should be built on the principle of “fair competition” in the EU single market – a likely nod towards cheap imports from China – and be designed to channel EU taxpayers’ money towards promoting local production, wrote Oliver Blume and Antonio Filosa.

The Volkswagen and Stellantis directors, respectively, reasoned that the made-in-Europe label should be based not just on the location of  production lines, but also on where electric powertrains, battery cells and other key components are manufactured.

Quid pro quo

In exchange for producing most of their vehicles on home turf rather than offshoring, the German automotive giant and Dutch-registered conglomerate are seeking compensation for the extra cost.

As new car sales must meet increasingly strict emission reduction goals, the executives proposed that the EU grant carmakers a CO2 bonus for each electric vehicle produced in the bloc.

“If a manufacturer meets these criteria for a large part of its fleet, this bonus should be recognised for all of its electric vehicles,” the CEOs said.

“This would encourage the automotive industry to maintain its production in the EU and reinvest the billions of euros saved in penalties into local investment.”

Carmakers divided

BMW’s position is markedly different, with the German premium carmaker arguing a switch to electric cars would be impossible without “global value chains and close international collaboration”.

“Any industrial policy must consider the significant value added by exports and ensure continuity in cooperation with international trade partners,” BMW told Euractiv.

The debate over how – or whether – to favour domestic manufacturers  comes shortly after carmakers, facing hefty fines for non-compliance and lobbying intensively through ACEA, persuaded the Commission to weaken CO2 emissions standards.

The EU executive is currently finalising a proposal for an Industrial Accelerator Act, which a recent leak suggests is likely to include specific provisions to promote, or even mandate, domestic production.

This idea is championed by France and the EU’s industry commissioner, Stéphane Séjourné, who recently mobilised thousands of European firms to back his call for strong made-in-Europe rules.