Stella Li, the Vice Chairwoman of the Chinese EV manufacturer BYD, has strongly criticized the European Union’s proposed local-content quota for vehicles. Speaking to “Der Spiegel”, Li dismissed the regulation as a “crazy law” described it as “difficult to implement” and warned that it would hinder many companies. She added that policymakers should generally refrain from intervening so heavily in the automotive industry.
The rule in question is part of the “Industrial Accelerator Act” presented by the EU Commission in early March. According to the proposal, electric, hybrid, and fuel cell vehicles will only qualify for state subsidies if they are assembled within the EU and if at least 70 percent of their components-measured by price-originate from EU-based production.
While Li voiced her opposition to the measure, she expressed confidence in BYD’s ability to meet such requirements if necessary. “If our competitors can achieve it, we can as well” she stated.
BYD is currently expanding its presence in Europe, establishing a factory in Hungary and planning another location in Turkey. The company has stated that by 2028, it aims to locally produce all of its electric vehicles intended for the European market. However, it remains unclear whether this level of local output will be sufficient to satisfy the planned quota.
The EU Commission justifies the initiative by citing the need to protect European industry. Local manufacturers, including representatives from Volkswagen and Stellantis, have recently shown openness to such local content stipulations. Conversely, critics have warned about potential consequences, including increased costs, more complex supply chains, and possible retaliation from other countries.