France leans toward stronger protectionist measures, while Germany worries about retaliation and trade conflicts, complicating consensus on the policy.

Internal EU divisions are evident as France pushes for more local protection and Germany urges caution to avoid provoking trading partners.

Including Turkey could risk creating a loophole for Chinese automakers to build there while still accessing EU subsidies, complicating policy design.

Industry backlash from automakers with significant non-EU operations, including Ford and Jaguar Land Rover, warns the new local-content rules could disrupt supply chains, invite retaliation, or create loopholes that dilute benefits for local manufacturing.

These manufacturers, reliant on non-EU resources, fear how the proposed regulations may affect their operations and global supply chains.

Britain, Turkey, and Morocco express concerns about eligibility rules, arguing that non-EU suppliers and nearby plants could undermine intended protections or create loopholes.

The draft would count parts from EU member states plus Iceland, Liechtenstein, and Norway as local content, with possible exceptions for trusted partners and considerations under WTO rules.

In particular, Turkey’s inclusion or exclusion is sensitive due to its manufacturing role and the risk of Chinese producers using loopholes to access EU subsidies.

Overall, the policy fight is a high-stakes balancing act for the EU: bolster regional manufacturing while avoiding retaliation and preserving global supply chains.

Turkey is a key low-cost manufacturing hub for several brands, and excluding it could threaten investment; supporters argue inclusion is strategically necessary.

The draft Industrial Accelerator Act would require about 70% of an electric vehicle’s parts (excluding the battery) to be EU-made to qualify for subsidies, with added EU-content rules for the battery pack and scrutiny of non-EU battery supply chains.

Analyses show EU-content varies by model, with some vehicles like the ID.3 showing high EU content and others relying on non-EU components, underscoring the complexity of measuring local content.