A debate over vehicle "origin" has recently swept Europe's automotive industry. In an effort to support local manufacturers, automakers from several EU member states have sought to use the proposed Industrial Accelerator Act (IAA) to impose new restrictions. They have urged EU policymakers to require that 70 percent of vehicles sold in the EU market contain at least 70 percent components sourced from EU member states, as well as Iceland, Liechtenstein, and Norway. This "origin-first" approach, contrary to market principles, has alarmed non-EU automakers. They warn that the resulting surge in compliance costs would inevitably be passed on to consumers in the form of higher vehicle prices.

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