Stellantis and Volkswagen Step Up Pressure on EU to Shield Auto Industry

Two of Europe’s largest automakers have intensified efforts to press EU policymakers for calibrated interventions to defend vehicle production and strategic supply chains. Stellantis and Volkswagen are combining direct engagement with regulators and heightened public messaging to press home concerns that generous incentives and industrial policies abroad are distorting competition and threatening European capacity. Their campaign singles out battery supply and midstream capabilities—cathode precursors, active materials and refining—as chokepoints where Europe lags and where policy can most effectively shore up resilience. Executives warn that many new European gigafactories are still delivering below nameplate output and that lower‑cost chemistries such as LFP from Asia are compressing unit costs, altering competitive dynamics. The automakers advocate targeted, legally defensible tools — clearer local‑content definitions in upcoming legislation, selective procurement preferences, and tailored financing to bridge early operational shortfalls — rather than blanket protectionism. Brussels’ Industry Accelerator Act and proposed rules on what counts as ‘domestic’ content will be decisive in steering where investment goes; firms differ on whether flexibility or tighter localisation is the priority. The manufacturers also flag the risk that broad localisation measures could fragment integrated cross‑border supply chains and provoke diplomatic frictions, notably with the UK and with major trading partners that are scaling upstream capacity. Policymakers are therefore being urged to pair trade‑defence options with public investment in grid and port infrastructure, skills and apprenticeships, recycling and second‑life battery capacity to rebuild midstream ecosystems. If the EU adopts narrow, WTO‑consistent interventions and targeted support for midstream capabilities, it could slow market share erosion and attract high‑value investment; poorly framed measures, however, could invite retaliation and raise costs for consumers and suppliers. The move signals greater coordination among OEMs to shape Europe’s industrial strategy ahead of key policy reviews and could accelerate procurement strategies that favour EU manufacturers while testing the EU’s ability to balance openness with strategic resilience. For suppliers and investors, the campaign raises the odds of near‑term policy shifts that reallocate subsidies, tighten origin rules, or prioritise battery ecosystem investments — changes that would materially affect where production and technology value is captured by 2030.