France backs possible UK inclusion in EU car subsidy rules

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France supports UK inclusion in EU car subsidy rules

Highlights

France shifted stance by urging the EU to consider UK inclusion in the Industrial Accelerator Act subsidy framework, citing deeply integrated industrial links.
Major manufacturers including Nissan and BMW warn of potential UK plant closures if the current EU proposal excluding UK-assembled vehicles from corporate fleet and small EV subsidies becomes law.
UK-EU automotive trade totals 80 billion euros annually, with industry groups and several EU member states lobbying for UK participation ahead of Thursday's first official ministerial discussion.

French shift on draft subsidy framework

As first reported by Financial Times, French Trade Minister Nicolas Forissier says Paris is now asking Brussels to address the UK's exclusion from parts of the Industrial Accelerator Act, despite Britain being outside the EU. He says the issue should be discussed because the UK remains a very close neighbour with deeply integrated industrial links.

That position marks a notable change for France, which has been a strong supporter of restrictive rules of origin in the Commission's draft legislation. Under the current proposal, vehicles for corporate fleets and small electric vehicles must be assembled inside the EU to qualify for related public procurement and subsidies.

The Industrial Accelerator Act, approved by the European Commission in March, still needs backing from member states and the European Parliament before becoming law. EU officials say industry groups are pushing for a narrower circle of countries to qualify as "Made in Europe" while preserving value chains, potentially including the UK under certain conditions.

Automotive supply chains and industry stakes

The debate carries significant implications for manufacturers with operations on both sides of the Channel. Nissan, one of the UK's largest automotive employers, says it would shut its Sunderland plant if the policy takes effect, while German carmakers such as BMW are also seeking to protect UK production including Mini manufacturing in Oxfordshire.

Other member states, including the Netherlands, are also pressing for the UK to be included, although many governments have yet to settle their positions before the first official ministerial discussion on Thursday. Some capitals and members of the European Parliament worry that broadening the geographic reach of the law further could dilute its aim of reviving Europe's industrial base.

The Commission's wider objective is to shield strategic industries from imports, particularly from China. While the proposal allows countries with free trade agreements with Brussels, including the UK, to access some procurement and subsidy schemes in clean technology, heavy industry and parts of the car sector if they reciprocate, it excludes incentives tied to greener corporate fleets and credits for small electric vehicles.

UK ministers have been lobbying since March for changes to the Commission's approach. The industry body SMMT says UK-EU automotive trade is worth 80 billion euros a year, underlining why manufacturers support continued UK participation in tightly linked European supply chains.

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