ANALYSIS
The ‘Made in Europe’ dispute: Why EU’s protectionist push threatens UK fleets
Latest protectionist legislation risks catching corporate electrification strategies in a high-stakes geopolitical crossfire. By Simon Harris.
The European Union is currently debating a new piece of legislation called the Industrial Accelerator Act. It includes a strict ‘Made in Europe’ requirement designed to protect continental manufacturing, specifically targeting the electric vehicle supply chain and zero-emission motor vehicles. While the political debate focuses heavily on global trade boundaries and geopolitical friction with Beijing, the real-world impact for UK fleet buyers could be severe, threatening higher vehicle prices, longer waiting lists and a significant disruption to corporate fleet electrification strategies.
The logic behind the EU’s current draft is highly contradictory. Brussels claims it must lock the UK out of its green subsidies and public procurement contracts to prevent third-party countries from using Britain as a backdoor into Europe. Yet, at the same time, EU member states such as Hungary and Spain are welcoming massive new Chinese car manufacturing plants inside their own borders.
Despite this double standard, it is the UK EV fleet sector that faces an immediate operational risk. A failure to reach a UK–EU industrial compromise will have a direct impact on fleet running costs and vehicle availability.
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Brussels is pressuring the UK to match EU tariffs on Chinese cars to gain entry to the ‘Made in Europe’ club
Higher prices on new electric vehicles
The primary risk of the UK being excluded from the ‘Made in Europe’ framework is the administrative friction it injects back into the clean-tech supply chain. Even with the current post-Brexit trade deal, vehicles crossing the English Channel must prove that a high percentage of their components originate from the UK or Europe to avoid heavy tariffs.
If the EU enforces the new legislation strictly, component sharing and battery cell sourcing will become more complex and expensive. Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes recently released an official warning detailing exactly how deeply embedded the UK remains in the continental automotive network: “The EU and UK automotive sectors have traded, invested and grown together over many years. Despite Brexit, supply chains remain deeply integrated and the cross-Channel trading relationship is worth €80bn [£68bn] a year, supporting jobs, growth and investment.”
If the rules are passed without amendment, UK-assembled electric cars and vans will be denied access to EU public procurement frameworks, including lucrative state-backed contracts for public sector fleets. Furthermore, manufacturers will lose the ability to use British-built electric vehicles sold into the EU to help meet their European clean-vehicle assembly quotas. For fleets, these combined manufacturing penalties will inevitably distort the wider market, passing extra costs down to buyers via inflated vehicle list prices and more expensive monthly leasing rates.
Physical bottlenecks and battery delivery delays
Car manufacturing relies on parts moving smoothly across borders without stopping, and this is especially true for battery assembly. Components often cross the Channel several times before a vehicle is finished.
EV manufacturing is highly integrated. Factories in the UK import raw battery cells from mainland Europe, assemble them into packs, and then export a large portion of the finished vehicles back to the Continent. If the UK is excluded from EU agreements, this back-and-forth movement triggers intensive border checks and customs audits.
When components get stuck in administrative backlogs at ports, factory assembly lines slow down. While corporate fleets are largely EV-ready and comfortable operating under the trajectory of the UK’s zero-emission vehicle mandate, artificial border friction risks choking the supply of the very vehicles they are eager and prepared to procure.
A squeeze on electric vans
The stakes are incredibly high for businesses relying on commercial vehicles, and the issue hits both right- and left-hand drive markets. Stellantis has concentrated its small electric van manufacturing at Ellesmere Port. This site does not just supply the UK. It builds both RHD and LHD models, exporting them to more than 20 countries.
If Brussels blocks UK-built vehicles from its green incentive schemes, it directly penalises the high volume of exports Ellesmere Port needs to remain financially viable. Hawes expanded on how this fragmenting of the supply chain will hit choices for vehicle buyers across the entire region: “The EU is rightly focused on strengthening its industrial base, but the UK remains fundamental to Europe’s automotive ecosystem and is therefore essential to that ambition. Excluding the UK from ‘Made in Europe’ would be an own goal, weakening competitiveness, reducing scale and limiting consumer choice.”
For UK companies trying to swap their diesel fleets for electric alternatives, any threat to British factories will restrict choice and make it harder to secure long-term parts and support.
Unpredictable operational costs
A stable fleet market relies on predictable monthly costs, but the threat of new trade barriers makes long-term lifecycle budgeting highly complex. The EU has put massive import taxes on electric cars arriving from China, and Brussels is pressuring the UK to match them to gain entry to the ‘Made in Europe’ club.
Increased prices from these tariffs will have no immediate, direct impact on the future numerical used value of the car. However, there will be a clear impact on pence-per-mile depreciation if upfront list prices shift. As there is currently no indication of how much of a tariff a car manufacturer would be prepared to absorb themselves to remain competitive, leasing companies face a guessing game. To buffer against this uncertainty, funding providers are likely to build a risk premium into their contract hire rates, driving up monthly operating costs for corporate buyers.
The political outlook for fleets
For UK EV fleet buyers, this intensifying trade debate shows that ordering vehicles is no longer a simple commercial negotiation. New data commissioned from Oxford Economics highlights that UK automotive production supports 250,000 jobs and generates €24bn (£20bn) of economic activity across the EU bloc.
Hawes called for a clear political solution to future-proof the sector: “We need a pragmatic regulatory approach that recognises the UK as a trusted partner, enabling our sectors to work together to meet the challenge of electrification and sustainable mobility.”
Until this partner status is formally agreed upon by lawmakers in Brussels, fleet procurement will remain thoroughly exposed to shifting geopolitical tides. If the rigid bureaucratic stance wins the day, British businesses will ultimately bear the brunt through restricted vehicle choices and higher running costs.
