Meeting the Chinese Challenge in the Automotive Sector. Is the Industrial Accelerator Act up to the task?

Résumé:

The “Strategic Dialogue on the Future of the European Automotive Industry” launched in January 2025 by the European Commission was meant to reach a more consensual and ambitious view on how to address the “Chinese challenge”, in particular via the introduction of local content policies to protect the European supply chain from aggressive Chinese economic dumping and avoid unfair competition from new Chinese assembly car factories in Europe . After more than one year of tensed negotiations, the final result is neither consensual, nor satisfactory.

The purpose of this report is to bring some clarity in what has been so far a quite confused and confusing debate. The starting point of this research is that an “European consensus” on how to deal with the “Chinese challenge” should not be based on political compromises between diverging doctrines, interests and views but on a clear, fact based and data driven understanding of the nature, timing and consequences of the “Chinese challenge” and of the most effective way of addressing it.

Is the IAA in its current form up to the task of meeting the “Chinese challenge” or is it just a “reasonable” and “acceptable” proposal given the lack of consensus inside the EU?

This report is meant to contributing to this debate by putting forward a more ambitious proposal than the current version of the IAA, and by explaining a) why we think that such a proposal is required to meet the “Chinese challenge” and b) how it can be quickly and effectively implemented by the EU and by the companies concerned.