How Will the EU's Proposed Legislation Affect Electric Vehicle and Battery Investments? How Should Chinese Companies Respond?

[Caixin.com] The Spanish industry media “La Tribuna de Automoción” recently reported that Geely Auto (00175.HK) plans to acquire a production line at Ford’s factory in Spain, and both parties have reached an agreement. As of Caixin’s publication, Geely Auto has not responded to inquiries.

Chinese automakers, including Geely Auto, are actively expanding into the EU market, but a series of measures aimed at protecting local industries have increased market barriers. In March 2026, the European Commission proposed the “Industrial Accelerator Act” (hereinafter referred to as the “Act”), which introduces several new restrictions.

Sources close to Geely Auto believe that the draft signals a clear intention to protect the local automotive manufacturing industry, and Chinese automakers and battery companies need to choose more prudent localization strategies.