Media reports state that the European Commission will propose that electric vehicles must contain at least 70% EU local content to be eligible for government subsidies, a measure aimed at protecting the EU's manufacturing industry. This proposal will be included in the European Commission's Industrial Acceleration Act, which is scheduled for release on February 25. Back in 2025, the European Commission announced plans to formulate local content rules for the electric vehicle value chain, as part of a comprehensive rescue package for the automotive industry that also includes relaxed emission regulations.

The proposal also mandates that several core battery components must be produced locally in the EU. At present, most EU automakers rely on Chinese and South Korean suppliers for their battery packs, even though many enterprises have set up factories in the EU. ACC, a joint venture battery company between Stellantis and Mercedes, has recently scaled back its plan to build three gigafactories in the EU.