Automakers express worries about EU's suggested local sourcing regulations - report

Written by Emily J. Thompson, Senior Investment Analyst

HMC-2.56%

Source: SeekingAlpha

Updated: Dec 11 2025

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Source: SeekingAlpha

Concerns Over Local Sourcing Targets: Automakers are worried that the European Commission's "Made in Europe" proposals, which include local sourcing targets for parts, could disrupt supply chains and increase costs, with some companies pushing back against initial local content levels of up to 70%.
Impact on Innovation and Trade: Industry leaders, including BMW's CEO, warn that complex local sourcing rules could hinder innovation in Europe, while Japanese automakers express concerns that the proposals may exclude friendly trading partners and lead to unintended consequences for the transition to clean mobility.
Support from Auto Parts Suppliers: Despite the concerns, auto parts suppliers argue that local sourcing targets are essential for their survival and could stabilize investment and protect jobs, especially in light of competition from Chinese electric vehicles.
Renewable Energy Sector's Backing: The renewable energy sector, including companies like Nel Hydrogen and industry group SolarPower Europe, has shown support for the proposed local sourcing rules, indicating a broader interest in strengthening the EU's industrial base.

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About HMC

Honda Motor Co Ltd is a Japan-based company principally engaged in the motorcycle business, the automobile business, the financial service business and the life creation business. The Company operates through four business segments. The Motorcycle segment is engaged in the research and development, production and sale of motorcycles, all-terrain vehicles (ATVs), side-by-side vehicles and related parts. The Automobile segment is engaged in the research and development, production and sale of automobiles and related parts. The Financial Service segment is engaged in the sales financing and leasing of its products. The Power Products and Other Business segment is engaged in the research and development, production and sale of power products and related parts.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.