“Made with Europe”: Toyota calls for partnership and pragmatism to secure Europe’s automotive competitiveness

16 October 2026

As EU legislators shape the Industrial Accelerator Act and the Automotive Package, and the UK Government reviews its Zero Emission Vehicle (ZEV) mandate, Toyota calls on policymakers to act pragmatically and with partnership in focus, to secure the future of Europe’s automotive industry.

Toyota speaks as a manufacturer established in Europe for more than 60 years, where it designs, develops and builds vehicles, engines and hybrid systems and invests in skills and know-how together with European partners and suppliers.

“Toyota is not a guest in Europe. We are a European manufacturer, and we want Europe’s automotive industry to succeed,”said Yoshihiro Nakata, President and CEO, Toyota Motor Europe.

Toyota fully supports Europe’s climate goals and believes that the decisions taken in the coming months must combine ambition with pragmatism including rules that reflect real customer demand, include an openness to all technologies that reduce CO₂ and embrace the significant contribution of trusted partners.

From “Made in Europe” to “MadewithEurope” 

Toyota supports the ambition of the Industrial Accelerator Act to strengthen Europe’s industrial base. However, ambition must be matched by scale. Together with trusted partners such as the UK, Türkiye and Japan, Europe’s market reaches around 31 million vehicles. That is the scale it needs to compete globally. 

Toyota believes that an EU-only assembly rule would send the wrong signal to long-standing investors – a vehicle made in Europe reflects far more than the origin of its parts. It also reflects the engineering, research and development, assembly and skilled jobs behind it. Toyota is calling on EU legislators to:

• Use a ‘Made with Europe’ approach – recognise a limited number of trusted free-trade and customs-union partners where there is full reciprocity, among them the UK, Türkiye and Japan 

• Phase in European-content requirements – build towards 70 per cent after three years, based on the ex-works value of the vehicle and recognising value created through engineering, R&D and the final assembly. 

• Do not apply substantive automotive requirements before 2030, in line with vehicle-development and supply-chain investment cycles. 

• Set a more realistic threshold for overall vehicle sales of 70 per cent, encouraging localisation but avoiding the proposed 85 per cent threshold which creates disproportionate compliance risks. 

• Apply one consistent set of rules across public procurement, incentives and corporate fleets, so that vehicles made with trusted partners qualify equally. 

• Temporarily exclude fuel-cell vehicles give the market and European supply chain time to develop before localisation rules apply. 

CO₂rules that are ambitious and achievable – and in pace with market demand 

The Automotive Package should keep an ambitious direction for 2035. It must also give manufacturers the flexibility to respond to the real pace of customer demand and market change. Battery-electric vehicles are forecast to make up around 45 per cent of new cars by 2030, while current rules require more than 55 per cent. For LCVs, the gap is wider. Without flexibility, manufacturers will be forced to spend on compliance rather than on the technologies Europe needs. 

Toyota is therefore calling on EU legislators to: 

• introduce a five-year compliance window from 2028 to 2032 to smooth the transition through 2030 and 2031; and set a 90 per cent CO₂ reduction target for 2035, with additional flexibilities for renewable fuels and green steel to close the remaining gap. 

• Treat LCVs separately, with a 35 per cent reduction target for 2030 and 80 per cent for 2035, and five-year averaging to reflect business customers’ needs for range, payload and uptime. 

• Recognise vehicles exclusively running only on renewable eligible fuels [VEEF] as zero-emission, under one EU definition aligned with the Renewable Energy Directive (RED III). 

• review targets regularly if demand or infrastructure does not develop as expected. 

A realistic pathway for the UK, aligned with the EU 

Toyota welcomes the UK Government’s review of the ZEV mandate. The move to zero-emission vehicles must stay on track, but at a pace that reflects real customer demand. With 2030 only three years away, investment decisions taken now will shape production to 2035 and beyond. Manufacturers and suppliers need a clear, realistic framework to invest with confidence.  Toyota is asking the UK Government to: 

• Set realistic 2030 levels, with a maximum ZEV share of 50 per cent for cars and 40 per cent for LCVs with flexibilities. 

• Define the framework for 2035 now, giving industry long-term direction. 

• Keep practical compliance options, extending flexibilities to 2035.  

• Align more closely with the EU by adopting a similar five-year approach.  

• Recognise renewable fuels as a route to decarbonisation and consider a UK equivalent of the EU’s VEEF approach. 

• Complete the ZEV mandate revision in 2027. 

“Isolation makes us weaker. Europe has the capabilities, the people and the trusted partners to lead, but legislation must reflect the pace at which customers are able and willing to change. ‘Made with Europe’ is our central request – because together, we are stronger,”said Matt Harrison, Chief Corporate Officer, Toyota Motor Europe. ​