Under proposals being developed by the EU, public subsidies intended to accelerate electric vehicle production would only apply to EVs built within European plants.
EU Industrial Plans Prompt Industry Alarm
The announcement by EU industrial strategy commissioner Stéphane Séjourné outlined the proposed Industrial Accelerator Act (IAA), which aims to shield the bloc from low-cost competition from China. Although Nissan has not publicly confirmed any warnings, several reports suggest the company has privately told the UK government that the Sunderland site could face closure if the rules are implemented.
The Society of Motor Manufacturers and Traders (SMMT) has also voiced concern, warning that the proposals could damage cross‑channel trade worth £70 billion annually. Nissan’s Sunderland factory is the UK’s largest car plant, employing 6,000 people and capable of producing 600,000 vehicles a year.
Industry Leaders Warn Of Competitive Disadvantage
Mike Hawes, chief executive of the SMMT, said: “The UK automotive sector is gravely concerned by the ‘Made in Europe’ proposals set out in the European Commission’s Industrial Accelerator Act. As drafted, it would discriminate against UK-made vehicles and components, damaging a trading relationship worth almost £70bn annually.”
He added that the IAA could place UK manufacturers at a “systemic competitive disadvantage” in the EU market and may breach the EU‑UK Trade and Cooperation Agreement.
Concerns centre on the third annex of the draft legislation, which outlines how corporate fleet purchases — a major source of new registrations and second-hand vehicles — could qualify for subsidies. Eligibility may depend on vehicles being assembled within the EU, potentially excluding UK‑built models.
European Industry Also Raises Concerns
Germany’s automotive industry association, the VDA, has also criticised the proposals. President Hildegard Müller warned that protectionist measures could raise costs for manufacturers and consumers while risking retaliatory action from key export markets. “In its current form, the IAA will not significantly improve the competitiveness of industry in Germany or across Europe. Unfortunately, its industrial policy impact is likely to remain very limited,” she said.
Calls For UK Inclusion In EU Framework
Hawes urged policymakers to resolve the issue quickly, calling for the UK automotive sector to be granted “full trusted partner status”. A Nissan spokesperson suggested that applying the same rules used to determine “Union origin” to all EV support schemes could offer a straightforward solution and align with the EU’s aim of simplifying regulation.
UK business secretary Peter Kyle travelled to Brussels last week to argue for the UK’s inclusion as a full partner in the initiative, although he did not meet Séjourné, who is responsible for the proposal.
