Toyota Motor Europe CEO Yoshihiro Nakata has called on the European Union to extend local content status under the proposed Industrial Accelerator Act (IAA) to the UK, Japan and Turkey, warning that the current framework risks damaging investment, jobs and competitiveness across Europe’s automotive industry.
Toyota Europe CEO Yoshihiro Nakata
Speaking at the Automotive News Europe Congress in Brussels, Nakata argued that the legislation, designed to strengthen European manufacturing and reduce reliance on external supply chains, fails to recognise the reality of today’s highly integrated automotive sector.
The Industrial Accelerator Act is a key part of the European Commission’s strategy to boost industrial competitiveness and support the transition to electrification. Among its proposals are requirements that certain electric vehicles and fleet vehicles must be manufactured within the EU and meet strict local content thresholds in order to qualify for public procurement opportunities and other incentives.
However, major vehicle manufacturers have warned that excluding trusted trading partners such as the UK, Japan and Turkey could have unintended consequences.
Nakata said Europe should embrace a broader definition of local content that reflects long-established industrial partnerships.
“Europe’s resilience is built not only on local production, but also on working with partners to create regional scale and shared success,” he said. “By working together we are all stronger.”
Toyota operates eight manufacturing facilities across Europe and the UK, employing approximately 25,000 people. The company believes the current proposals risk penalising manufacturers that have invested heavily in integrated European production networks spanning multiple countries.
The UK is expected to be one of the countries most affected if the legislation remains unchanged. Despite leaving the European Union, Britain’s automotive industry remains deeply interconnected with European supply chains, with components crossing borders multiple times before a vehicle reaches final assembly.
Jaguar Land Rover (JLR) has emerged as one of the strongest critics of the exclusion. The company has warned that treating UK-made content as non-local could disrupt established supply chains, increase manufacturing costs and undermine the competitiveness of European vehicle production.
In comments submitted to EU policymakers, JLR argued that the proposed rules fail to reflect the integrated nature of the European automotive industry. The company warned that requiring manufacturers to replace UK-sourced components with EU-only alternatives could create significant inefficiencies while adding administrative complexity through new content verification requirements.
JLR has also cautioned that the legislation could ultimately make vehicles more expensive for consumers while reducing the flexibility manufacturers need to compete globally.
The concerns extend beyond Britain. Turkey has become one of Europe’s most important vehicle manufacturing hubs, supplying both vehicles and components to markets across the continent. Excluding Turkish production from local content calculations could reduce the country’s attractiveness for future investment and weaken existing supply chain links.
Image: Toyota
Japan, meanwhile, remains a major investor in Europe’s automotive sector. While Japanese manufacturers have extensive production operations within Europe, excluding Japanese-built vehicles and components from the framework could create barriers for companies that rely on global manufacturing strategies and cross-border technology sharing.
Industry leaders argue that the legislation’s goals are understandable. The European Commission wants to increase manufacturing’s share of the EU economy while ensuring Europe remains competitive in the global race for electric vehicle production and battery technologies.
However, critics say the proposed rules risk prioritising geography over competitiveness.
Nakata warned that excluding key allies could undermine future investment, employment and technology transfer at a time when the European automotive sector faces growing competition from both China and the United States.
The debate has highlighted wider divisions within the industry. Some supplier groups support stricter local content rules as a way of protecting European manufacturing capacity and encouraging more domestic production. Others argue that resilience comes from diversified supply chains and strong international partnerships rather than protectionist measures.
As discussions on the Industrial Accelerator Act continue, pressure is growing on EU lawmakers to amend the legislation and recognise the contribution made by countries that are already closely integrated into Europe’s automotive ecosystem.
For Toyota, JLR and other manufacturers, the issue is not simply about trade policy. It is about ensuring that future industrial strategy supports investment and innovation without disrupting the supply chains that have helped make Europe one of the world’s leading automotive production centres.
If Brussels ultimately broadens the scope of the Industrial Accelerator Act could have significant implications for the future competitiveness of the European automotive sector and its relationships with key industrial partners including the UK, Japan and Turkey.
