Stellantis and Renault back UK inclusion in EU car protection rules

Two of Europe's largest automakers walked into the Paris motor show this week with a straightforward message for Britain: join our club, but play by our rules. Emanuele Cappellano, who oversees Stellantis's European operations—a portfolio that includes Fiat, Citroën, Opel, and Vauxhall—and François Provost, chief executive of Renault, both urged the UK government to secure inclusion in the EU's emerging "Made in Europe" legislation. The catch: Britain would need to accept limits on Chinese car imports as the price of entry.

The backdrop is a car industry in genuine distress. European manufacturers are contending with demand that has not recovered to pre-pandemic levels while simultaneously pouring tens of billions into the shift toward electric vehicles. Into this vulnerable moment has stepped China. As the EV transition opens the door to new competitors, Chinese carmakers have captured an expanding slice of the European market—currently standing at 6 percent. At the Paris show, where French President Emmanuel Macron appeared on Monday, Chinese brands including Li Auto, GAC, and Chery were on display with explicit plans to deepen their European footprint.

The EU's response has been to tighten the rules around who gets to benefit from its industrial support. A new quota, confirmed Monday and set to take effect in December, will cap hybrid electric vehicle imports from China at 350,000 cars annually—a move Brussels expects will cut China's market share roughly in half. More broadly, the EU is drafting the Industrial Accelerator Act, which would require cars to be "made in Europe" and contain sufficient European parts and materials in order to qualify for EV subsidies or to be purchased by public bodies across the bloc. The specifics remain contested. If Brussels defines "European" narrowly—as only the EU's 27 member states—the UK would be excluded, a prospect that has triggered intense lobbying from both British industry and government.

Stellantis operates a factory in Ellesmere Port, Merseyside, producing small vans, giving the company a direct stake in the outcome. Cappellano framed the case plainly: the UK should be treated as equivalent to the EU's 27 members. "We have a lot of relationship, we have footprint," he said. "Historically UK has been very close to the European market." Europe's main automotive lobby groups, ACEA and Clepa, have also pushed for British inclusion, though some French voices—including the country's industry minister—have argued the opposite, citing Brexit as reason to exclude Britain.

Provost's position was more conditional. He said there was "no other choice" but a deal between the UK and EU, but he made clear what Britain would have to concede. If the UK wanted to join the European industrial ecosystem, it would need to impose its own limits on Chinese imports. "If you want to operate in Europe, you have to deeply invest in the whole value chain, final manufacturing, suppliers, R&D, technologies," he said. The implication was sharp: an open market and industrial protection cannot coexist. Cappellano went further, arguing that Britain faced a binary choice. "It's very difficult to defend industrial footprint and at the same time let the market completely open to import," he said. "Either one or the other."

The UK has so far resisted imposing tariffs on Chinese vehicles, but that position is shifting. Business Secretary Jonathan Reynolds said this month that the decision was under review. Cappellano also pressed the case for tariffs, urging the UK to clarify its priorities. He expressed skepticism about expanding the rules to include other non-EU countries such as Japan, Turkey, and Morocco, and he argued for a longer timeline—until 2030—for manufacturers to source batteries from within Europe, acknowledging that China's dominance in battery supply cannot be quickly displaced.

What emerges is a negotiation with real stakes. The UK car industry stands to gain access to EU subsidies and procurement contracts if it accepts the terms. But those terms require a fundamental shift in trade policy—moving from an open market to one that actively restricts Chinese competition. The executives speaking in Paris were not demanding; they were laying out the geometry of the deal. Whether London accepts it will shape not just the future of British car manufacturing, but the broader architecture of UK-EU economic relations in an era when industrial policy, not free trade, has become the default language of governments.