Date: 10/09/2027
Mr Steg, before we turn to the topic of Europe, it would be helpful if you could put the current geopolitical situation into context.
Steg: The global order as we have known it — based on rules, agreements and treaties — has changed dramatically. Yet a new global order has not emerged so far. As a superpower, the United States is relying on military coercion and protective tariffs to enforce its interests. China is entering global markets with significant industrial overcapacities — including the European market.
We are experiencing a new phase of global competition. Technologies, raw materials and industrial policy are being used strategically to achieve economic and political objectives. In the current phase, energy policy and the security of energy supply are becoming decisive issues for national sovereignty and economic competitiveness. Due to the war in Iran, countries such as Germany that depend on energy imports are particularly affected by high oil and gas prices. In this critical situation, Europe must find answers in energy, technology and industrial policy to hold its own.
How can Europe succeed in this situation? Is that even possible?
Steg: Europe can maintain its position if it stops underestimating its own strength. With more than 450 million inhabitants, the European single market is attractive to every country in the world. There is substantial purchasing power here, and good money can be earned here. But we need a level playing field. Europe does not want to, and should not, seal off its internal market, nor should it deny access for certain countries. But, in Europe’s own interest, we must make it clear that we will not stand by while industries in Europe come under pressure, markets are lost, production sites are threatened and companies struggle to survive. That could also weaken the foundation of social and political stability of our societies. That is why we are advocating for ‘Made in Europe’: competitors are welcome to benefit from public funding and incentives if they invest in the EU, produce here, pay people in line with local collective agreements, build European supply chains and comply with European rules. That would be competition on a level playing field — and one we are happy to face.
Volkswagen, Renault and Stellantis have jointly presented a paper. Why this show of unity?
Steg: When the world around us is changing dramatically, we in Europe should remember what has made us strong. That includes Franco-German cooperation. When Berlin and Paris agree, things usually move forward in the EU as well. Consequently, we are sending a strong Franco-German signal: the Volkswagen Group, Stellantis and Renault, which together account for more than 60 percent of European vehicle production, support a sensible and practical ‘Made in Europe’ strategy.
Joint statement by Volkswagen Group, Renault Group and Stellantis on the Industrial Accelerator Act
And what are the key demands for such a ‘Made in Europe’ strategy?
Steg: We need realistic criteria. In addition, targeted incentives must ensure that potential cost disadvantages for European manufacturers are offset. The issue of batteries illustrates this very clearly. We need, among other things, European production support for battery manufacturers such as our PowerCo, so that they can offer competitive prices during the critical ramp-up phase.
Volkswagen and the entire automotive industry are based on globalized supply chains — does that fit with ‘Made in Europe’ at all?
Steg: Volkswagen’s supply chains are much more deeply rooted in Europe than many people think. Our aim is to preserve the industrial base in the EU. Put simply: if a car carries a ‘Made in Europe’ label, substantial part of it should actually be made in Europe
Together with Renault and Stellantis, we have described a pragmatic approach here. If 70 percent of a manufacturer’s new-vehicle fleet meets the ‘Made in EU’ criteria, the remaining 30 per cent would also receive the same benefits. Such a fleet-based approach ensures that the focus genuinely remains on the EU, while established trading partners can continue to be included.
Just recently, the idea of a so-called Alliance of the Middle States was discussed in the German newspaper Handelsblatt. From a geopolitical perspective, this is an interesting concept and, other than one might initially think, by no means incompatible with a limited geographical scope for the IAA (‘Made in Europe’). Countries such as the UK, South Korea, and Japan that would be part of such an alliance could still benefit from a ‘Made in Europe’ framework through our proposed fleet mechanism, within a dedicated share of up to 30 per cent of a manufacturer’s overall European fleet.
If we as a company receive a ‘Made in Europe’ label, what benefits would be granted?
Steg: The whole ‘Made in Europe’ strategy is about linking public funding in future to ‘Made in Europe’ criteria. For example, something like the German electric vehicle bonus would only apply to ‘Made in Europe’ vehicles. The same applies to public procurement, from police cars to city buses. There is also discussion about certain tax benefits for company cars applying only if ‘Made in Europe’ requirements are met. In addition to possible advantages in government funding and procurement, it is also about financial relief as a reward for ‘Made in Europe’. Back in February, Oliver Blume made a concrete proposal in a joint guest article with Stellantis CEO Antonio Filosa: all electric vehicles that meet ‘Made in Europe’ requirements should receive CO₂ supercredits for doing so. We would combine urgently needed flexibility in CO₂ fleet targets with an incentive for European industrial production.
Many currently see China as our biggest competitor. What role does ‘Made in Europe’ play here?
Steg: Volkswagen Group is not in competition with a state. ‘Made in Europe’ is a response to emerging development and state of unfair play that simply cannot be accepted. An increasing share of vehicles sold in Europe is being imported from outside the EU. We, however, want industry in Europe to be strengthened and to have a future here. We want industrial jobs, technologies and expertise in key industries such as automotive, chemicals, steel and mechanical engineering to remain in the European Union. In our view, ‘Made in Europe’ can help make competition fairer and more balanced.
New competitors from China in particular have become serious rivals within just a few years. Does it help to shut ourselves off?
Steg: That is an important concern — and we should address it openly: ‘Made in Europe’ is not about protectionism. That would not make Europe stronger. Real competition pushes us to become better, to develop smarter solutions and to create new technologies. That is why ‘Made in Europe’ is a much wiser approach granting a commitment to an industrial policy based on European interests, and a response to the many market distortions caused by state intervention and undervalued currencies. Like countervailing duties on individual products, ‘Made in Europe’ is an effective and legitimate instrument for offsetting distortions and unfair practices. ‘Made in Europe’ is precisely not about shielding European industries across the board from foreign competition.
What are the next political steps?
Steg: The consultations are progressing quickly, reflecting the importance of the issue. It is quite possible that Parliament will define its position soon, following the publication of the rapporteurs’ initial position. As Volkswagen, we will continue to contribute our clear positions. In this context, we have also recently published a joint statement together with Renault and Stellantis, outlining our shared position on these first crucial negotiation steps in Parliament.
Nevertheless, it could still take up to a year before we receive ‘Made in Europe’ requirements, or the resulting benefits. Do we have that time, Mr Steg, and how do you assess German support and European cohesion regarding the Industrial Accelerator Act?
Steg: The United States and the People’s Republic of China have shown the way by aligning their policies with national interests. In one case, it is called “America First”; in the other, “Made in China”. One can complain that Europe is often too slow and reacts too late. However, by European standards, one year of deliberations for a law of this kind really does amount to lightning speed. It shows that policymakers have understood that industrial production will only remain in the European Union if the necessary conditions are created now. ‘Made in Europe’ is ultimately about confidence in Europe’s industrial future. It creates incentives to invest and innovate here, while helping to secure jobs, technology and value creation in Europe.
