Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below: 

Chinese carmakers are taking an increasing share of the European car market, particularly when it comes to electric vehicles. Why are European carmakers now opening their factories to their Chinese competitors?

Until recently, the main concern in Europe was Chinese-made electric vehicles being imported into the EU. That’s why, two years ago, the EU imposed hefty tariffs on Chinese electric cars.

But Chinese manufacturers have found another way into the European market: they are setting up production here. Some are building factories of their own. Others are entering partnerships with European carmakers and using their existing production sites.

That’s the case with Stellantis and Chinese manufacturer Leapmotor. And now Dongfeng is also negotiating to produce cars at the French plant of Rennes La Janais. Because by moving production to Europe, Chinese manufacturers may be losing one of their main advantages, which is cheap labour.

But low labour costs are only one part of their competitive edge.

Chinese manufacturers also continue to benefit from state support. And setting up production in Europe doesn’t necessarily mean building brand-new factories.

In many cases, Chinese companies are looking to partner with European manufacturers and use factories that are already there — factories that are no longer operating at full capacity. That means they can save significantly on investment costs. And they can also rely on their European partners’ existing sales and distribution networks.

So how big is this Chinese presence in Europe becoming? For 2028, there are already 12 projects involving Chinese carmakers setting up production in Europe. Several are in Spain, with others in France, Belgium, Slovakia, Hungary, Sweden and Austria.

Now, why would European manufacturers allow their Chinese competitors to produce cars in their own factories? Part of the answer is that European carmakers are struggling to keep up in electric vehicles sells. And that is contributing to factory closures and job losses.

European manufacturers have to meet EU targets on average CO2 emissions each year. And producing more electric vehicles is necessary to meet those requirements.

So partnerships with Chinese manufacturers can serve two purposes: they can help European companies fulfilling their green cars objectives, while also keeping existing factories and jobs running.

Though there is a longer-term risk for European manufacturers. The more Chinese companies establish themselves in Europe, the more competitive pressure they could put on European brands — potentially even leading to takeovers. That has happened before: Volvo Cars, for example, was acquired by Chinese group Geely in 2010. 

In Germany, carmakers are for now refusing to open the doors of their production sites to the Chinese. But they do have partnerships with Chinese companies to produce vehicles in China, where they can benefit from lower production costs. That explains why they were very much opposed to imposing tariffs on Chinese electric vehicles.

But the situation is now changing. Volkswagen closed its Dresden factory last year, and other German plants are also facing closure risks. Germany’s car industry is therefore increasingly joining calls for stronger protection against Chinese competition.

And that brings us back to the Franco-German paper that is circulating in Brussels, which calls for measures to restrict Chinese access to the European market.

Because this debate goes well beyond cars. The EU is increasingly concerned about Chinese competition and dependence in a range of strategic industries. This will be discussed next week, when EU leaders meet in Brussels.

The European Commission could also present a new so-called “diversification” tool, either at the summit or around it. One possibility would be to require companies not to rely exclusively on China for certain critical materials. Something which could trigger what we call a trade war. I’ll be following that very closely!

European Commission President Ursula von der Leyen at the podium Photographer: Dati Bendo © European Union

European Commission President Ursula von der Leyen used her State of the Union address on Wednesday (16 September) to make the case for a more independent Europe, confronting war, economic competition, AI disruption and climate change — while proposing Canada become the EU’s first associate member.

Opening her #SOTEU speech with Charles Dickens’ “best of times, worst of times”, von der Leyen described a Union stronger but also more exposed to external threats.

“The state of our Union is the strongest it has ever been,” she said, while acknowledging it could feel “as precarious as it has ever been”. “Europe has chosen to forge its own path. And a stronger, independent Europe is now emerging.”

Competitiveness and energy

Von der Leyen called kickstarting Europe’s economy her “number one priority”, promising faster permitting, less red tape and further integration of the Single Market.

The Commission will propose a new Banking Package and create a European Corporation on Critical Raw Materials to secure supplies needed for chips, batteries, clean technology and defence.

With high energy costs weighing on European industry, von der Leyen called for faster electrification and investment in grids, renewables and nuclear power to reduce dependence on imported fossil fuels.

Climate after a 'summer of truth'

After a summer of fires, drought and extreme heat, von der Leyen promised a climate resilience framework focused on 100 of Europe’s most vulnerable territories, alongside a Climate Insurance Alliance, European Heatwave Plan and Water Initiative.

She also floated a future European Firefighting Fleet, declaring that Europe “can, must and will stay the course” on its climate targets.

AI: Opportunity and threat

AI was presented as both an economic opportunity and an emerging security threat. Von der Leyen warned that advanced models could enable hacking “on a level we never thought possible” and pledged closer cooperation with Canada, the UK and others on AI security.

At the same time, Europe will expand computing capacity and push AI into health, transport, agriculture, manufacturing, defence and space. “Above all, we want AI with human agency,” she said.

Jobs, housing and social rights

The Commission plans a Quality Jobs Act before the end of the year and a European Care Deal, alongside measures tackling housing pressures.

Von der Leyen said technological change must benefit workers, while strongly defending women’s rights and Europe’s social model.

PHOTO  European Commission President Ursula von der Leyen and Canadian Prime Minister Mark Carney at the podium Photographer: Dati Bendo © European Union

Canada moves closer

One of the biggest surprises came with Canadian Prime Minister Mark Carney in the chamber.

Von der Leyen proposed an “Alliance for the Future” spanning technology, defence, energy, critical minerals, AI and the Arctic — before going further.

“I would like to work with you on opening the door for Canada to be the first associate member of the EU,” she told Carney. “We share one ocean, one set of values, one way of seeing the world.”

Security, defence and Ukraine

With drone incursions, cyberattacks and sabotage raising security concerns inside the EU, von der Leyen proposed a new European security strategy and an Emergency Security Protocol for incidents falling below the threshold of armed aggression.

She also wants to establish a European Security Council and strengthen joint European defence capabilities.

Ukraine faces what von der Leyen called the “toughest winter of the war”. She promised humanitarian and energy support, stronger air defences and deeper defence-industrial cooperation with Kyiv.

Borders, democracy and children online

The Commission will propose an Emergency Response Framework for exceptional migration crises and strengthen Frontex, while launching a Mediterranean Youth Skills and Jobs initiative.

Von der Leyen also announced an EU KIDS ACT, including no social media for under-13s and restrictions for children under 15, followed by a broader Digital Fairness Act.

Political groups draw battle lines

EPP leader Manfred Weber backed the focus on AI, defence and competitiveness but pushed against restrictive climate policies. “Climate change is a reality,” he said, arguing Europe needed “innovation and not bans.”

S&D leader Iratxe García Pérez demanded that von der Leyen turn “words into action”, backing climate investment, housing and worker protections while warning that simplification must not become deregulation.

Renew Europe leader Valérie Hayer made a pointed appeal for the Parliament’s pro-European majority, as the EPP has increasingly worked with parties further to the right on some legislation. “There’s only one possible majority. It’s our pro-European majority,” she said. “We need to do more. We need more Europe, and we need it more quickly.”

Greens/EFA co-chair Terry Reintke accused EU leaders of failing to respond urgently enough to extreme heat and wildfires. “We are in the middle of a climate emergency,” she said, demanding stronger Green Deal implementation while insisting: “We are not powerless. Europe is strong, and Europe can be even stronger.”

ECR co-chair Patryk Jaki struck a sharply different note, attacking the Commission over bureaucracy, energy costs and industrial competitiveness. Europe, he argued, was “as weak as it’s ever been.”

Von der Leyen closed on the central theme running through the speech: European sovereignty in an increasingly hostile world.

“The fate of Europe,” she said, “must remain in the hands of Europeans.”

European Commission President Ursula von der Leyen during her speech in 2025 Photographer: Dati Bendo © European Union, 2025

Ursula von der Leyen is expected to make the case for a more independent and resilient Europe in her State of the European Union address on Wednesday (16 September). But analysts and political groups in the European Parliament are demanding something more concrete: evidence that the Commission can turn its expanding ambitions into results Europeans can see.

The State of the European Union address, commonly known in Brussels as the “SOTEU”, is the Commission president’s annual speech to Parliament setting out priorities for the year ahead. Modeled in part on the US president’s State of the Union address to Congress, the EU version began in 2010 under then Commission president José Manuel Barroso. Von der Leyen will deliver this year’s address at 9:00 tomorrow morning (16 September).

The speech comes as Europe is confronted with an ongoing war in Ukraine, a fragmenting global trading system and the challenge of strengthening defence while reviving competitiveness and financing the green transition. At home, von der Leyen must reconcile political groups that broadly agree on the need for a stronger Europe but differ over what that means.

For Manfred Weber, chairman of von der Leyen’s centre-right European People’s Party group, the focus should be on voters’ economic and security concerns.

“Europe’s priorities must reflect people’s concerns: jobs, the cost of living and economic security,” Weber said. He called for a stronger economy and well-paid jobs, tighter control of Europe’s borders, leadership on AI, continued support for Ukraine and “a strong European defence pillar”.

On the centre-left, Iratxe García Pérez, president of the Socialists and Democrats group, argues that the Commission has relied too heavily on deregulation.

“Europe needs more than announcements,” García Pérez said. “It needs concrete policies backed by the necessary resources.” The S&D wants greater emphasis on affordable food, housing and energy, quality jobs and climate action, alongside European sovereignty in defence and digital technologies.

Renew Europe is also making delivery the benchmark, calling on von der Leyen to present “a credible plan turning European ambition into visible results” and framing the choice as one between united European action and fragmentation.

Analysts at the European Policy Centre see the same challenge extending to Europe’s position in the world.

“Von der Leyen will tell us that the EU is forging new partnerships around the globe,” said Almut Möller, the EPC’s director for European and Global Affairs. Canadian Prime Minister Mark Carney’s attendance will reinforce the geopolitical dimension of the speech.

But strategic autonomy goes beyond defence and trade. Georg Riekeles, the EPC’s head of political economy, identifies financial dependence as an overlooked vulnerability. With the international financial system becoming less stable, Europe cannot assume Washington and the US Federal Reserve will play the stabilising role they did in previous crises. Von der Leyen “must therefore address financial sovereignty as a core element of European security”, he argues.

Technology poses another test. Elizabeth Kuiper, the EPC’s head of health and societal resilience, says von der Leyen should “reject the trade-off between competitiveness, technological progress, and the EU’s social model”, particularly as AI affects employment, income security and social cohesion.

Climate policy presents a similar collision between ambition and resources. Stefan Šipka, the EPC’s head of sustainable prosperity, argues that Europe needs “a robust delivery mindset, no more strategies” as it tries to combine defence, decarbonisation and economic security.

The common thread is delivery. Von der Leyen has no shortage of strategic objectives. The harder task on Wednesday will be explaining how they fit together, how Europe will finance them and what takes priority when they conflict.

For EPC policy analyst Eric Maurice, von der Leyen “must provide strategic focus and political clarity”.

“As the midterm in her second term approaches,” Maurice said, “it is time for von der Leyen to present a vision and deliver.”

The European Commission wants to cut the EU’s public procurement rulebook from around 900 pages to 200, in a sweeping reform that aims to simplify tendering while giving governments greater scope to favour European economic and security interests, writes Catherine Feore.

Executive Vice-President Stéphane Séjourné held up the existing body of rules alongside its much slimmer replacement, to illustrate his point. 

“These here are the European rules which currently govern public procurement in Europe: 900 pages,” he said. “And this is what we are proposing today… down to 200 pages.”

The proposed Public Procurement Act would replace three EU procurement directives with a single regulation, with a view to simplifying procurement provisions spread across 26 sectoral laws and cutting the number of procedures from five to three.

The Commission estimates the changes could save businesses and public authorities €650 million a year in administrative costs.

The reform matters because of Europe’s massive purchasing power involved. EU public procurement exceeds €2.5 trillion annually, around 15% of EU GDP, covering everything from trains and hospitals to energy infrastructure, schools and IT systems.

From lowest price to strategic purchasing

The proposal is not just about cutting red tape. Brussels wants governments to use their purchasing power more strategically.

The Best Price-Quality Ratio would become the standard method for awarding contracts, with quality normally accounting for at least 30% of the assessment and 50% for labour-intensive contracts. Authorities could consider environmental and social performance, innovation, security and resilience alongside price.

The commitment to a so-called European preference has been tempered by the EU’s international commitments, but access can be restricted when a country doesn’t reciprocate market access. Restrictions could also be imposed where reliance on foreign suppliers creates security-of-supply dependencies or threatens EU economic security.

“European public money should, wherever possible, create jobs, investment and opportunities in Europe rather than filling the order books of our competitors,” Séjourné said.

Five procurement procedures would become three: open, dynamic and innovation procedures. Each would allow negotiation between buyers and bidders.

The Commission also plans an integrated EU digital procurement marketplace connecting national e-procurement platforms. A company registered through one connected system should be able to bid elsewhere in Europe without repeatedly submitting the same documentation. This is intended to reduce bureaucracy and tackle one of the current system's weaknesses: too little competition, particularly from SMEs and companies bidding across borders.

National, regional and local priorities may appreciate this flexibility in theory, but constrained budgets often mean that price will remain the bottom line for many. This legislation offers greater freedom in determining needs, but it remains to be seen what its impact will be.

PHOTO CREDIT: European Commission Executive Vice-President Stéphane Séjourné says the rules reduced from 900 pages to 200 pages © European Union