EU reveals Industrial Accelerator Act proposal

How might the EU Industrial Accelerator Act impact the automotive industry and what are

our key takeaways from the Commercial Fleet Summit?

This is the Automotive Update, presented by Autovista24.

Hello and welcome to the Automotive Update.

I'm Tom Gegas, the editor of Autovist24, here with what you need to know this week.

First up, the long-awaited Industrial Accelerator Act has been proposed.

Otherwise known as the IAA, the legislation is designed to boost demand in low-carbon European-made products.

Should the Act be adopted, public procurement and support schemes will be set low-carbon and made in the EU targets.

Member States will need to set up a single digital permitting process to accelerate and simplify manufacturing.

The goal here is to increase local value creation, strengthening the region's industrial base,

amid what the Commission calls unfair global competition and increasing dependencies on non-EU suppliers.

The Act looks to increase manufacturing share of EU GDP to 20% by 2035, and that's up from 14.3% in 2024.

However, the IAA does outline that the EU should remain open to outside investment.

The Act establishes conditions for investments in strategic sectors exceeding 100 million euros,

where a single third country controls more than 40% of global manufacturing capacity.

These investments must create high-quality jobs, drive innovation and growth, and generate value in the EU.

Additionally, they must guarantee a 50% minimum level of European employment.

So what does all of this mean for the automotive industry specifically?

Well, a Q&A published by the Commission highlights that low-carbon requirements will be created for steel used by the sector,

as well as aluminium, which will also need to meet made in EU standards.

The IAA also introduces made in EU provisions for electric vehicles and their components, the Commission stated in its Q&A.

The Act will now be negotiated by the European Parliament and the Council of the European Union before its adoption.

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Following the motor show at the start of this year, the automotive industry has another event in Brussels this week.

So live from the commercial fleet summit by phone is Autovista24 journalist Tom Hooker.

Hi Tom.

So that thing's off its much warmer and much sunnier here in Brussels than it was when I was off here in January.

So very happy about that and very excited to dive into what's been going on at the commercial fleet summit so far.

That's great to hear.

Now I know this event focuses solely on like commercial vehicles, LCVs for short.

So maybe you could start off by telling us a bit about what you've seen so far, a bit of a summary, if you will.

Sure.

So to give you kind of a brief overview, I think a lot of the main themes that have been discussed so far is regulation and policy and how vital that is to ensuring that there is a smooth transition in the LCV market from internal combustion engine power frames to EVs.

And I think that is a lot of the challenge is making policy, which is is stable and how a stable policy from both a free field perspective, also in you and Europe and support that foundation.

Of course, one from that there's been a lot of talk about electrifying the LCV market, but also there's been a lot of discussion as well about data and telematics and connected LTVs and how this can actually have a material impact.

So I'm helping up time and return on investment or ROI as well.

And I'll actually add is something that yeah, we've been hearing a lot of these events and more increasingly over the last few years, AI.

But there's been a lot of talk at this event how maybe there still needs to be a bit of work until we start seeing the benefits of including AI in fleet operations until that actually translates into balance sheets and into return on investment.

That's really interesting. I know that AI is just one of those technologies now that is absolutely everywhere and is a vital component for so many businesses.

But just to come back to a topic you mentioned earlier Tom electrification, maybe you could draw up for us the differences and the similarities between the electrification of the LCV market and the passenger car market.

Are they night and day or is there not too many differences?

It's a great question Tom and I think to break this down, maybe it's easier to look at some places where things are similar and some places where things are a bit different.

So I think an overall standpoint is left talk now about if it's going to electrify but more about how fast and how they're actually going to achieve that.

And there are some points within that which I think are very important to cover which I think certainly have some similarities to the passenger car market.

First of all, charging structure is being seen as both a bottleneck and also an opportunity as well.

You then obviously have the interaction with the electricity grid and this is certainly emerging as a new consideration and important consideration for through operators.

Also something that I think is aligned with the passenger car market is the fact that sustainability and business purpose are becoming one thing sustainability isn't just a sort of additional consideration on the side.

It's how sustainability is actually benefiting the business.

But there are some clear differences and I think from some of the conversations I've already had and some of the presentations I've sat in on.

That will see the market definitely cannot be bundled in with passenger cars. It's its own well and it has its own landscape.

I think that PCO and cost frameworks are driving decision making and buyers and operators I think have different considerations.

These things are maybe fire rock in their priority list.

And I think the other thing I would say is going electric is is still not suitable solution to everyone and to every business using LCDs.

There is absolutely still business new cases for these also for example or possibly even plug in hybrids or BHVs.

It really depends on the driver profile, the country that they're in.

It develops the driving infrastructure is there so I think if I can summarize the electrification of LCDs is certainly not a black and white issue.

You previously mentioned technology the advance of AI connected vehicle data. It's all so important for fleets.

What practical technological use cases are actually resonating with key stakeholders like fleet operators.

Yeah, so I mean that's one of the things that the moderators of these presentations have been posing to panelists is where are you actually seeing these these benefits.

I think it's an easy thing to talk about but maybe a hard thing to quantify right from the telematics side where I think it's having an impact is predictive maintenance and this is in turn leading to improved uptime.

And in terms of AI, I think one of the first use cases that we may be already seeing is helping fleet operators to manage and reduce fuel costs.

And then this in turn is is having a higher return on investment.

Some other areas that have been touched on I think I'll hear more about later is through optimization and energy efficiency gains as well.

So then if we fast forward to 2030 Tom based on what you've heard over the last couple of days.

What do you think is going to be fundamentally different for commercial fleets?

Yeah, it's a hard question.

Unfortunately, I don't have a crystal ball, but I think for sure fleets are going to become more integrated with digital.

I think that's already happening and that integration is only going to become stronger in the years ahead.

The vehicles may be selected increasingly from data led frameworks rather than just purely brand loyalty.

And I think we are going to be more consideration of the impact that these LCD fleets are going to be having on the electricity grid as more of them become increasingly electrified.

And of course, I think they're going to be playing maybe a bigger part in helping to reduce the overall CO2 emissions of the automotive industry.

Amazing. Tom, thank you so much for taking the time to speak to us today. I hope the rest of the event goes really well.

And of course, we're really looking forward to reading your coverage of it on Autovista 24. So thank you very much.

Once again, a big thank you to Autovista24 journalist Tom Hooker for appearing in this episode and to web editor James Roberts for co-producing.

Additional thanks go to special content editor Phil Curry. The music was better find a solution fast by Richard Ames.

Thank you very much for listening to the Autovista24 podcast.