Perspectives

Trilligent continues its global Trilligent Tech Talks series, bringing together innovative minds to discuss trending technology topics, this time with the focus on competitiveness in the automotive sector. Our most recent Brussels event, a policy roundtable discussion, was held on June 3, 2026, in partnership with APCO Worldwide. We explored how the automotive sector is navigating a triple transformation – decarbonization, technical disruption and geoeconomic competition – and how EU industrial policy is responding to these pressures to facilitate the automotive transition.

Our conversation was framed by a keynote speech delivered by Mr. Mark Nicklas, Head of Unit, Automotive & Mobility Industries – I2 at the DG Internal Market, Industry, Entrepreneurship and SMEs (GROW), unpacking the Industrial Accelerator Act and the Automotive Omnibus. The discussion was hosted by Trilligent Advisory Board Members and senior experts in mobility policy, Holger Krahmer and Bernard Lycke.

How can Europe align its automotive transition with industrial value creation?

Europe’s automotive transition is increasingly being viewed through a competitiveness lens. While there is broad agreement on the need to decarbonize transport and the need for technological innovation in the automotive sector, questions remain about how to ensure that the transition also supports investment, employment and industrial capacity within Europe. The Industrial Accelerator Act and the Automotive Omnibus were designed to address this issue and guide industry – the question is whether regulation boosts or hinders competitiveness.

This challenge extends beyond vehicle production alone. Energy costs, permitting procedures, infrastructure deployment, skills shortages and supply-chain resilience are crucial conditions for industrial competitiveness. Geopolitical factors, such as armed conflicts and trade disputes introduce another layer of volatility for example through fuel and component shortages – while these are hard to account for, geopolitical risk and mitigating measures increasingly need to be part of business considerations and investment planning.

What creates investment (un)certainty in a period of regulatory pivot?

The European industrial and automotive policy landscape are under review – including through the Industrial Accelerator Act, the Automotive Omnibus, as well as the revised Foreign Investment Screening rules, just to name a few crucial regulatory tools under recent discussions. This means much of the regulatory framework is in flux, at the time when quick and decisive industry action to pour investment into European industrial capacity and the automotive ecosystem is needed.

Investors in the industrial value chain need, on the one hand, a reliable regulatory framework – on the other hand, they also need flexibility to respond to fluctuations in demand and unexpected market developments. Overly rigid regulatory requirements are likely to deter investment, and uncertainty around future regulations, market demand or implementation timelines can also hold investment decisions back. A good illustration is the debate over CO2 emission reduction targets. While we focus on percentage differences in the targets themselves, the lack of clarity and the drawn-out policy process can delay investment in crucial areas like charging stations.

Conditions for non-European market entrants are equally uncertain. Tightening trade measures, shifting industrial policy and stronger localization requirements all complicate the cost-benefit calculation. In practice, companies face a strategic choice: move early through partnership-based routes – such as joint ventures, alliances or licensing agreements – to secure market access before stricter rules take effect, or commit to a deeper industrial footprint through greenfield/brownfield investment, even if that means meeting tougher regulatory requirements once the Industrial Accelerator Act becomes effective.

What should ‘Made in Europe’ mean for an industry built on global supply chains?

“Made in Europe” requirements are central to the current policy pivot at the EU level, though they are just as polarizing amongst European players as they are amongst non-European ones. This is largely because automotive supply chains are strongly globalized and interconnected. The devil is in the detail – the final definition of what counts as European made, and how component origin thresholds are set, could end up drawing the line between winners and losers.

The objective is to ensure that public money supports European jobs and industry. Assembly alone will not earn a ‘made in Europe’ stamp, substantial value creation and the use of European components will be required. However, it is equally important for Europe to be aware of strategic dependencies, such as in permanent magnets, and potential limitations, including battery production without an artificially inflated price premium. The debate should centre less on ownership and more on the conditions under which investment contributes to the multiple goals the EU is aiming to juggle. For certain European regions, foreign investment is a lifeline.

How this plays out on the global market represents another delicate balance. The danger is if EU policy measures are seen as protectionist and disproportionate, they could trigger retaliation from trading partners, hurting the very industries Europe is trying to protect and strengthen.

Europe’s automotive transition – is no one left behind?

The transition to zero-emission mobility is often discussed through the lens of passenger cars, but the automotive ecosystem is far more diverse, both in terms of vehicle type and the segment of society and economy it services. Vans, trucks, rental fleets and commercial vehicles are often underrepresented in the debate, even though they have individual needs when it comes to electrification pathways, infrastructure requirements, vehicle utilization rates and customer purchasing decisions.

The same applies if we look at the wider automotive ecosystem – we need to think about what happens after sale, as well as SMEs that form a crucial part of the automotive ecosystem. European value creation is also driven by repairs and maintenance services, as well as the used vehicle market, for example.

Consumer confidence and the rise of electric vehicles are also a complex issue. It is the function of a robust and reliable charging infrastructure, EV prices, battery range and the lack of a proper second-hand market, without incentives for second-hand EVs, just to name a few factors. We need to enable second and third hand owners for all segments of society to be able to participate in the transition.

Are tech and innovation the frontline of Europe’s next automotive challenge?

Decarbonization, electrification and industrial localizations are key drivers of the political debate today. However, the industry’s future competitiveness challenges may lie elsewhere. Software-defined vehicles, artificial intelligence, connectivity, data access and autonomous driving technologies are increasingly shaping the future of mobility. As a result, the automotive sector is becoming as much a digital industry as a manufacturing one.

Europe already has a robust tech regulatory framework – paving the way on data protection, ethical AI and cybersecurity measures, to name a few. At the same time, as the automotive industry looks to innovate, data access and privacy related concerns may pose barriers, for example in developing advanced driver assistance and autonomous systems in Europe. Meanwhile, many non-European markets press ahead in developing advanced technological capabilities in the sector. The challenge is to ensure that Europe can be in the lead, rather than only trying to catch up after technologies are developed elsewhere.

So where does this leave us?

Europe needs to strengthen its automotive industrial base. Investment certainty and global openness are essential for this goal, including across the automotive, battery and charging value chains. Supply chain resilience is key, though measures need to be targeted, realistic and compliant with Europe’s international trade obligations. Policy must reflect different vehicle segments – passenger cars, vans, trucks and rental fleets for example – as well as the parts of society these vehicles service.  Energy prices and grid access need to be seen as major drivers of the transition in creating the infrastructure conditions to drive consumer demand. Regulatory simplification is necessary, but it should not come at the expense of regulatory stability and business predictability. Europe’s automotive sector depends not only on its ability to manufacture the next generation of vehicles, but also on its ability to build a functioning ecosystem around it.

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At Trilligent, we closely follow the evolving landscape of tech, sustainability and mobility regulation, including the Industrial Accelerator Act and the Automotive Omnibus. Our global team is well-positioned to help clients navigate these complex frameworks and ensure their voice is heard by policymakers and influential stakeholders in the discussions shaping the future of the sector. Reach out if you’d like to explore how these regulations impact your business or stay ahead of the curve.

This piece was written in collaboration with Trilligent Advisory Board Members and senior experts in mobility policy, Holger Krahmer and Bernard Lycke.