EU's 'Made in Europe' Auto Rules Put Turkey's $30.1bn Export Business at Risk

Turkey's automotive sector faces serious disruption under the European Union's proposed Industrial Accelerator Act, which would require that 70% of a vehicle's component value — excluding the battery — originate in Europe.

Germany and France earlier this month agreed a framework that grants "European origin" status to suppliers from non-EU countries including the United Kingdom and Norway, but excludes Turkey. The IAA was proposed in March and still faces major legislative hurdles before becoming law.

Turkey's auto exporters association OIB put the country's automotive exports to the EU at $30.1 billion last year. Ayhan Zeytinoglu, chairman of the Economic Development Foundation, told Deutsche Welle the measure would cause "great damage" to Turkey's EU trade, noting that 73% of Turkey's total automotive exports go to the EU.

The act initially covers battery-electric vehicles, plug-in hybrids and fuel-cell models, which made up 27% of new EU car registrations last year. Under the revised Franco-German plan, some self-charging hybrids and petrol and diesel vehicles could also be covered after 2035 — a category that would capture most of Turkey's roughly 800,000 vehicle exports to the EU.

A further concern is that Chinese automakers are expanding production in Turkey, which critics say could allow back-door EU market access — one reason cited for Turkey's exclusion from the framework.

Tommaso Pardi, director of the automotive research network GERPISA and a senior researcher at France's CNRS, noted that the 70% target was generous: an average European-made electric car already sources around 83% of its non-battery parts from within Europe.