The European Commission is set to propose, in the Industrial Acceleration Act to be unveiled on February 25, that electric vehicles must fulfill a minimum of 70% EU local content criteria to qualify for government subsidies. This initiative is designed to safeguard the EU's manufacturing sector and counteract competition from China. As far back as 2025, the European Commission had already hinted at its plan to implement local content regulations for the electric vehicle supply chain. Opinions within the industry are split on this matter: component suppliers and certain lobbying groups are in favor, whereas automakers like BMW and Mercedes-Benz fear that such a policy might incite retaliatory actions from China and hinder innovation. The proposed rule also specifies that subsidized vehicles must be assembled within the EU, with no less than 70% of their components (excluding batteries) manufactured in the EU, and that key battery components must also be produced locally. Suppliers are advocating for the inclusion of all components in the rule's purview, while the industry is concerned that Chinese automakers might find ways to bypass tariffs. Automakers are split in their opinions regarding local content regulations.