For the automotive industry, the letters IAA used to mean a motor show in Germany. From 2028, they will mean market access. The Industrial Accelerator Act (IAA), proposed by the European Commission on 4 March 2026, converts a large share of the European new-car market into a conditional market: public procurement and every publicly supported purchase channel, from municipal fleets to corporate-fleet incentives to consumer purchase premiums, will be open only to vehicles that are assembled in the EU, carry at least 70% EU content excluding the battery, and meet phased localisation thresholds for battery and e-powertrain components. With corporate registrations alone making up around 60% of the EU car market, the conditioned channels cover the majority of European volume.
Five findings from our analysis deserve more attention than they are getting.
- The clock: the vehicle rules apply six months after entry into force, which realistically means 2028, not the widely reported 2029.
- An equivalence asymmetry: membership of the World Trade Organization’s Government Procurement Agreement (GPA) opens the public-tender channel but not the far larger subsidy channel, which remains reserved for the EU and its free trade agreement (FTA) and customs union partners.
- The data: the certificate of conformity (CoC) becomes an origin document, and the variant-level data chain behind it does not yet exist at any original equipment manufacturer (OEM).
- Combustion vehicles are not exempt: low-carbon material requirements apply regardless of drivetrain.
- A conditional invitation: Chapter IV of the IAA attaches ownership, technology and workforce conditions to precisely the Chinese investment the act invites.
The window for shaping and preparing is now, not at adoption. The content thresholds, the trusted-partner list and the verification regime are all still moving in Parliament and Council, and positions filed in the next twelve months will shape rules that bind for a decade.
At the same time, the origin data capability the act demands takes sourcing cycles to build, not quarters: supplier contracts with origin clauses, variant-level content accounting and battery component traceability cannot be retrofitted in the six months between adoption and application. Whoever waits for legal certainty will be compliant and late. This paper sets out what the act does, who is affected and how, the details most commentary has not surfaced, and what we believe European and Chinese OEMs should each do about it, in sequence, starting now.
