Don’t Let the Accelerator Become a Brake
22 October 2026
EIES response to the European Council’s draft Industrial Accelerator Act position and the Franco-German automotive proposal
The Industrial Accelerator Act (IAA) must not become an industrial decelerator. Europe’s capacity to manufacture strategic technologies is a matter of national and economic security. EIES calls on the Council to strengthen the IAA’s economic-security safeguards and reject the Franco-German proposal to transfer its automotive provisions into the Automotive Package. The Council should retain the IAA’s battery requirements and introduce earlier, binding localisation requirements across vulnerable supply-chain stages.
Civilian markets provide the scale needed to sustain the technologies and know-how that Europe’s energy security and defence depend on. The Council should preserve its proposed improvements for solar and wind while closing gaps in demand incentives for the battery sector, foreign-investment safeguards and implementation. The priority is lasting European capability, supported by dependable demand, technology transfer and effective oversight, including in battery supply chains whose commercial scale also underpins defence applications.
Key Messages
Batteries are a gateway technology and the backbone of a sovereign Europe. The cells, materials and equipment that power transport, grids and industry also go into the drones, military microgrids and dual-use systems Europe needs to defend itself. Civilian markets, especially automotive, provide the scale needed to sustain that capability.
The Franco-German proposal would turn the accelerator into a brake, keeping battery requirements weak until 2032. Moving the automotive provisions from the IAA into the Automotive Package would create unnecessary complexity for battery manufacturers, while its timetable and compliance flexibilities would weaken localisation and demand for European batteries.
Delay sends industrial value elsewhere. Europe’s electrification will proceed with or without European-made batteries. Late localisation risks locking manufacturers into high-risk supply chains while European battery projects struggle to secure orders. Postponing the battery-origin rules due from January 2027 under the EU-UK Trade and Cooperation Agreement (TCA) would compound the damage and erode investor confidence.
European preference alone cannot compensate for winder market uncertainty. Indicative corporate-fleet targets, looser emissions compliance and super-credits would let manufacturers comply with fewer battery-electric vehicles. Suppliers need credible purchasing commitments to finance and scale production.
The Council compromise contains real gains, but also clear gaps. It retains the IAA’s automotive battery component requirements and brings forward European-content requirements for solar and wind. However, it softens safeguards on foreign direct investment (FDI), retains broad cost exemptions and makes industrial acceleration areas optional.
Key Recommendations
Reject the Franco-German proposal and hold the timetable: Keep automotive battery provisions in the IAA and maintain the agreed TCA timetable, so European producers can plan, secure financing and scale capacity.
Introduce earlier, binding localisation requirements: Phase in binding requirements covering cells and vulnerable midstream stages, including active materials and precursors. Retain the automotive battery requirements of three European components, including cells, rising after three years to five, including cathode active material and the battery management system (BMS).
Close the cell and midstream gaps: Remove broad cost exemptions and require origin at critical component stages, so support does not reward final assembly alone. Battery-storage rules should cover European cells from the outset and guarantee demand for European cathode materials, anode materials and electrolytes.
Make foreign investment deliver lasting European capability: Make technology transfer and EU workforce requirements mandatory. Preserve joint-venture conditions, including the 49% cap on foreign ownership or control, and resist new exemptions, the seven-year waiver of conditions and reduced Commission oversight.
Align demand with Europe’s battery value chain: Vehicle subsidies, relevant tax schemes, public procurement and corporate-vehicle provisions should consistently reward European production. Preserve binding fleet targets and a dependable electrification trajectory, rewarding actual European production rather than accounting multipliers.
Retain the Council’s gains and prevent circumvention: Keep the wider investment screening of wind, ultimate ownership and successive investments; stronger solar and wind content requirements; and the exclusion of high-risk suppliers of control and remote-access systems. Count permanent magnets towards the e-powertrain category while tightening requirements beyond 50% Union-origin, and ensure partner-country lists and origin rules close routes for circumvention.
Production on European soil alone does not secure technological capability. Without these measures, Europe risks expanding production while its dependencies in know-how and upstream inputs remain intact.