Chinese carmakers adapt to Europe rules
European rules to stimulate local production have prompted Chinese automakers to build factories and supply chains across the continent, ahead of the measures being finalized, according to local reports.
The proposed “Made in Europe” rules, part of the planned Industrial Acceleration Act, aim to strengthen the EU’s industrial base by encouraging more production and prompting foreign manufacturers to produce more goods locally and rely on European suppliers.
The plan comes as Chinese brands’ market share in the region is growing rapidly, with many Chinese automakers not wanting to wait for the outcome of negotiations and instead accelerating their localization plans by expanding their production networks in Europe.
Changan Automobile’s CEO, Zhao Fei, revealed that the company is committed to building local production capacity and is exploring opportunities in Europe, with plans to produce 180,000 vehicles annually in Europe by 2028 and 350,000 by 2030.
Other Chinese automakers, including Xpeng, Chery, and GAC, are also following European production plans, building around local supply bases, with Xpeng’s vice president, Ye Xingjun, stating that the company wants to start production simultaneously with the implementation of the “Made in Europe” rules.
European supplier Magna is already producing electric vehicles for Xpeng in Austria.
Volkswagen’s CEO, Oliver Blume, supported the “Made in Europe” slogan, stating that a strong Europe depends on a strong industry. However, the current proposal excludes non-EU countries, such as Turkey, the UK, and Morocco, where vehicle production and supplier networks are deeply integrated with the European automotive industry.
The Turkish Automotive Exporters Association reports that the country’s automotive industry provides 250,000 jobs in the EU. Automakers operating in these countries, along with local industry groups, argue that limiting the rules to only EU-local content would harm supply chains that have developed in the wider region.
As the EU negotiates the rules, it is also mediating an agreement with China to halve hybrid vehicle imports into the bloc. Automotive analyst Felipe Munoz stated that it is unlikely Chinese automakers will be deterred by the political debate, as they have already demonstrated their ability to adapt quickly.
The EU imposed tariffs on Chinese-made electric vehicles in October 2024, and many brands shifted their focus to plug-in hybrids. Munoz noted that “Made in Europe” makes life a little bit harder for the Chinese, but it’s not going to stop them. They have already shown their ability to respond to changing market conditions.
