Macron's 'Buy European' EV Push Jolts Automakers, Exposes EU Rift
A proposal to favor EU-made electric vehicles could boost Stellantis and Volkswagen but risks a trade war with China and creates friction with Germany.
A proposal championed by French President Emmanuel Macron to create a “Buy European” policy for electric vehicles is sending tremors through the global auto industry, signaling a potential protectionist shift that could reshape the continent's competitive landscape.
The initiative, which aims to prioritize EU-based manufacturers for subsidies and government purchases, could provide a significant tailwind for European automakers like Stellantis, Renault, and Volkswagen. However, it poses a direct threat to imports from Tesla and fast-growing Chinese brands, while simultaneously exposing deep strategic divisions between Paris and Berlin.
Driving the French proposal is the rapid market penetration of Chinese EV makers. Chinese brands are on track to capture as much as 11% of the Western European EV market in 2025, up from just over 9% in 2024, according to Schmidt Automotive Research. This surge, built on competitive pricing and a mature supply chain, has intensified pressure on European incumbents and fueled concerns about the continent's industrial base.
European automakers saw a positive reaction in the market following the reports. Shares of Stellantis NV climbed 3.3% in recent trading, while Volkswagen AG and Renault SA also posted gains of over 2.5% and 1.3% respectively, as investors priced in the potential for a more protected home market.
Conversely, the policy creates significant headwinds for non-EU players. Tesla Inc., which has a market capitalization of over $1.4 trillion, relies on imports from its Shanghai gigafactory to supplement production from its Berlin plant. Depending on the policy's final structure, even vehicles assembled in Germany could be penalized if their battery components are sourced from outside the bloc. Chinese automakers like BYD, which has seen its year-to-date stock return rise nearly 20%, would face a formidable new barrier to its European expansion plans.
The most significant obstacle to the French initiative may come not from abroad, but from within the EU itself. Germany has voiced strong opposition, fearing that protectionist measures against China could provoke a swift and damaging trade war. German automakers, including Volkswagen, BMW, and Mercedes-Benz, are heavily reliant on the Chinese market for a substantial portion of their global sales and profits.
Berlin's government fears that Beijing would retaliate against any EU tariffs by targeting German cars manufactured in and sold in China. This stance reflects a delicate balancing act for the EU's largest economy, which sees open trade as essential to its industrial health. According to a report from Clean Energy Wire, the German auto industry views the tariffs as a counterproductive measure that could ultimately harm its own manufacturers.
The debate comes as the European Commission conducts a separate anti-subsidy investigation into Chinese EV imports, which could result in tariffs being imposed next year. Macron's call for a “Buy European” preference would go a step further, moving from punitive measures to active industrial policy.
For now, the proposal remains a political statement of intent. For it to become law, it would require broad support among the EU's 27 member states—a consensus that appears distant given the clear economic friction between French and German interests. Investors and auto executives will be closely watching whether Paris can rally enough support to turn its protectionist vision into policy, a move that would fundamentally alter the rules of the road in one of the world's largest car markets.