Transport & Environment (T&E) has welcomed the European Commission’s Industrial Accelerator Act (IAA) as an important step toward strengthening Europe’s electric vehicle (EV) and battery industries, but warns that several loopholes must be closed to build a truly resilient domestic supply chain. In a new position paper, T&E outlines five key recommendations for decision-makers to ensure a meaningful increase in EU-made EV technology.
First, the IAA should apply consistent ‘Made-in-EU’ origin requirements across all vehicle categories, restricting subsidies and tax incentives to EVs built with locally sourced batteries and components. T&E urges removal of cost-based exemptions and component availability carve-outs, and emphasizes that batteries from free-trade partners should not qualify as European.
Second, the act should focus exclusively on strategic parts of the electric powertrain—such as cells, modules, electronics, e-motors, chips and software—rather than extending origin rules to non-critical components like seats or bumpers. This targeted approach would concentrate industrial efforts on bolstering supply-chain security.
Third, local production capacity must span the entire battery value chain. T&E highlights the need to include precursor cathode active material (pCAM) alongside anode active material, critical raw materials and recycled content in the IAA’s incentive scheme. It proposes phasing in these requirements by 2032 to support both component manufacturing and competitive battery recycling.
Fourth, foreign direct investment (FDI) provisions should cover all significant automotive and battery sector investments. T&E calls for FDI conditions to apply to cumulative investments over the past 36 months, ensuring that major announced projects genuinely onshore production and create local value.
Finally, the IAA should establish lead markets for low-carbon steel and aluminum by extending Made-in-Europe criteria to all vehicle types. This would reinforce Europe’s industrial decarbonization goals and promote a greener automotive supply chain.
Source: Transport & Environment
