The UK’s leading automotive representative has slammed new plans from the European Union that “discriminate” against car manufacturers and could cost the UK billions of pounds.The European Union has introduced new “Made in EU” measures to protect companies and manufacturers on the continent, primarily against Chinese brands.The Industrial Accelerator Act will be launched to boost manufacturing, help businesses grow and create jobs across the continent over the coming years.It will involve the introduction of “targeted and proportionate” Made in EU or low-carbon requirements, which will apply to strategic sectors, like steel, cars and net zero technologies.
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The EU said this would be done to protect European capacities and boost demand for technologies and products made in Europe.It noted that manufacturing represented 14.3 per cent of EU GDP in 2024, although the IAA aims to increase this share to 20 per cent by 2035.Despite this, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), criticised the measures, warning that they could adversely impact the UK’s production sector.He said: “The UK automotive sector is gravely concerned by today’s ‘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 £70 billion annually. “It is a position that the UK industry and government sought to avoid, given we are both each other’s largest customers and suppliers.”The EU said the IAA would introduce conditions to ensure foreign direct investments would bring value, including €100million (£87million) for emerging sectors, such as electric vehicles and batteries.The Draghi Report, which was the basis for the IAA and Made in EU proposals, acknowledged the threat of Chinese manufacturers to clean technology and electric vehicles.LATEST DEVELOPMENTSPopular vehicles targeted for tax hikes and parking restrictions under new proposalsElectric car sales soar as drivers snub petrol and diesel in favour of ‘cheaper running costs’Petrol drivers in the firing line as Rachel Reeves’ fuel move threatens new cost surge – ‘Double blow’It said this was down to a “powerful combination of massive industrial policy and subsidies, rapid innovation, control of raw materials and ability to produce at a continent-wide scale”.Despite this, Mr Hawes said UK manufacturers would be put at a “systemic competitive disadvantage” in the European market, given the eligibility criteria for EU27 members.The expert warned that the new conditions could even be a “breach” of the EU-UK Trade Cooperation Agreement, which is often referred to as the Brexit deal.Mr Hawes urged the European Union and the UK Government to work together to “resolve the situation” and ensure the UK gets “trusted partner status”.”This is not just to ensure choice for British and European consumers – especially in zero emission vehicles – but to deliver the economic growth and security everyone craves.”The European Union recently changed the rules around its upcoming petrol and diesel car ban, with increased emphasis on vehicles and batteries made in the EU.New rules state that carmakers will need to comply with a 90 per cent tailpipe emissions reduction target from 2035 onwards, with the remaining 10 per cent coming from low-carbon steel as part of the Made in EU scheme.Manufacturers will also benefit from “super credits” for small affordable electric cars made in the European Union, with these rules set to be confirmed before 2035.
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