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Mercedes Chief Warns EU Against Excluding Britain from ‘Made in Europe’ Industrial Rules

14 October 2026 at 20:16

Mercedes-Benz chief executive Ola Källenius has warned that excluding British manufacturers from European industrial preference rules would damage automotive production on both sides of the Channel, increasing pressure on Brussels ahead of negotiations over its proposed Industrial Accelerator Act.

The head of Mercedes-Benz has warned that excluding British manufacturers from the European Union’s proposed industrial preference rules would damage the competitiveness of carmakers across Europe, challenging Brussels over legislation intended to protect European production from growing international competition.

Ola Källenius, chief executive of Mercedes-Benz and president of the European Automobile Manufacturers’ Association (ACEA), criticised the prospect of restricting British participation in the forthcoming “Made in Europe” framework during discussions in Brussels on Wednesday, 14 October.

His intervention comes as European governments negotiate the Industrial Accelerator Act, which would introduce European-content requirements affecting public procurement and certain forms of industrial support.

The proposed legislation is intended to strengthen manufacturing within the EU, but its treatment of production in neighbouring countries has become contentious, particularly in an automotive industry whose factories and suppliers operate across national borders.

European production extends beyond the EU

British manufacturing remains closely integrated with continental European automotive production despite the United Kingdom’s departure from the single market.

Components manufactured in Britain are incorporated into vehicles assembled in EU member states, while British factories depend on engines, batteries, electronics and other parts produced in continental Europe.

The value of this integrated manufacturing system depends on companies being able to source components across borders without unnecessary restrictions.

Källenius warned that excluding the UK from the proposed rules would weaken manufacturers operating on both sides of the Channel.

His position reflects industry concerns that a narrowly defined European-content regime could impose additional costs on companies already facing pressure from Chinese competition, slowing demand and substantial investment requirements.

As EU Today reported in September, British Prime Minister Andy Burnham has been pressing Brussels to recognise the UK as a trusted industrial partner under the emerging framework.

Germany has also supported a broader approach that would allow selected trading partners to qualify under European-content rules where reciprocal conditions are met.

France has favoured stronger preferences for production within the EU itself, reflecting differences among member states over how far European industrial policy should extend beyond the Union’s borders.

A dispute over industrial sovereignty

The Industrial Accelerator Act proposed by the European Commission is intended to strengthen Europe’s manufacturing base and support production in strategically important sectors.

Its provisions address public procurement and industrial incentives affecting products including vehicles, steel, aluminium and clean technologies.

The Commission wants European public spending to support local industrial capacity rather than reinforce dependence on imports from major international competitors.

China has become the principal focus of those concerns because of its expanding manufacturing capacity, particularly in electric vehicles and batteries.

However, measures designed to counter Chinese industrial competition could also affect established trading partners whose manufacturers form part of European supply chains.

The United Kingdom, Norway, Switzerland and Turkey occupy different legal positions in their economic relations with the EU, but all maintain important industrial connections with member states.

An approach that treats their production as equivalent to imports from countries with substantially different market conditions could require European companies to reorganise existing supplier relationships.

For manufacturers, replacing a supplier may involve more than simply ordering components from another factory. Production standards, technical certification, logistics and long-term investment arrangements can make changes expensive and difficult.

Industry demands regulatory certainty

Following an ACEA board meeting on Wednesday, European manufacturers called for faster progress on the wider automotive legislative package.

In its 14 October statement, ACEA urged EU institutions to advance negotiations so that the package could be finalised early next year.

The association argues that manufacturers require a predictable regulatory framework to plan investments in electric vehicles, production facilities and new technologies.

Källenius linked the industry’s transition towards zero-emission mobility with the need to preserve employment and strengthen economic security.

European manufacturers are simultaneously investing heavily in electrification while competing against Chinese companies with established battery supply chains and significant production capacity.

The resulting financial pressures are particularly serious for manufacturers that must develop new vehicle platforms while maintaining existing factories and dealer networks.

Additional restrictions on component sourcing could complicate those decisions at a time when companies are seeking to reduce costs.

Britain refuses to follow EU tariffs automatically

The dispute has acquired a further dimension following remarks by British Business Secretary Jonathan Reynolds.

Speaking on Wednesday, Reynolds indicated that Britain would not automatically follow the European Union in imposing tariffs on Chinese vehicles.

The UK government maintains that trade measures must be determined according to British economic interests rather than adopted simply to align with Brussels.

That position complicates London’s attempt to secure favourable treatment under European industrial rules.

EU policymakers have argued that closer alignment on trade defences could support Britain’s claim to be treated as a trusted partner.

British ministers, however, must consider whether restrictions on Chinese imports would benefit domestic manufacturers and consumers.

The disagreement will form part of the broader economic relationship being discussed ahead of the next UK–EU summit, scheduled for 20 November.

The wider implications for EU–UK relations

The automotive dispute follows earlier negotiations over British participation in European defence procurement and other industrial programmes.

In both cases, London wants access to initiatives designed to strengthen European production while remaining outside the EU’s institutional framework.

Brussels must determine how far preferential treatment can extend to non-member countries without undermining the objectives of its industrial policy.

The Commission’s proposals have already revealed disagreements between governments favouring a tightly defined European manufacturing base and those seeking to preserve wider commercial partnerships.

Källenius’s intervention strengthens the argument that industrial protection cannot be considered separately from the supply chains on which European manufacturers depend.

The final legislation will influence investment decisions, procurement arrangements and the position of British suppliers within the continental automotive industry.

The outcome will also provide an indication of how far the EU is prepared to accommodate its closest trading partners as it attempts to strengthen European manufacturing against growing competition from China.

Excluding UK from ‘Made in Europe’ law will hurt entire EU car industry, Mercedes boss warns

Ola Källenius says it will ‘weaken the industry on both sides’ ahead of act intended to counter non-EU competition

Locking the UK out of the EU’s flagship industrial “Made in Europe” legislation would amount to a “deliberate choice” by EU leaders to “hurt” the car industry across the bloc, the head of Mercedes-Benz has said.

Speaking in his capacity as president of the European Automobile Manufacturers’ Association (ACEA), Ola Källenius said such a move would “weaken the industry on both sides”.

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© Photograph: Christoph Steitz/Reuters

© Photograph: Christoph Steitz/Reuters

© Photograph: Christoph Steitz/Reuters

Planned capacity of 12,000 interceptors a year, under 100 seconds to target: US firm pitches a low-cost drone killer

14 October 2026 at 14:21

Launch of the Vespid Mk 1 using a solid-fuel booster.

US defense-tech company CHAOS Industries introduced its Vespid interceptor family in Washington on 12 October, as the Association of the US Army (AUSA) annual meeting opened there, the company announced. CHAOS pitches the drones as low-cost defense against small and mid-size drones and one-way attack munitions. The company expects initial production capacity of 12,000 interceptors a year, expandable to 50,000 as demand grows.

The pitch lands as Russia moves its strike drones to jet power. Russia has stopped building the Geran-3, an earlier jet model, and makes about 3,000 faster Geran-4s and Geran-5s a month, Ukraine’s military intelligence (HUR) told Militarnyi in August. In mid-September, Ukrainian President Volodymyr Zelenskyy said two Ukrainian companies had passed combat tests with interceptors against such drones, while 67 were still working on them. Ukrainian defense outlet Defense Express measured the new US drones against exactly that threat.

One to carry, one to launch in batches

The Mk 1 made its first public appearance on 12 October aboard a Forterra MESA autonomous ground vehicle, Army Recognition reported. It fires from tubes on launchers such as the 10-round ISS Aerospace HAL10. It takes midcourse guidance from CHAOS radars or external command systems, then an AI-assisted infrared seeker handles the final approach, the company says. An electric ducted fan rather than a jet engine drives it, which CHAOS says cuts cost and logistics compared with turbojet interceptors.

The smaller Mk 0 is man-portable and needs no operator input once fired, its product page says. Both are rated to reach a target in under 100 seconds, with a listed range of 10+ km. Defense Express called that range a serious weakness that more launchers around a city could offset.

Modular FPV drone interceptor “Mangal” by Phantom Defence. September 2026.
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CHAOS lists cruise speeds of 100 m/s (360 km/h) for the Mk 0 and 150 m/s (540 km/h) for the Mk 1. Defense Express said those speeds may be enough to intercept the Geran-4 and Geran-5, which it puts at 340 km/h and 450–600 km/h.

Ukrainian makers say their interceptors already down jet Gerans

Wild Hornets’ Sting interceptors downed several of the slower jet-powered Geran-3s in November 2025. An unnamed Wild Hornets representative told NV, in an interview published on 22 September, that the company’s new interceptor had destroyed about ten Geran-4s and several Geran-5s in limited use. The company plans mass production within a month of finishing combat tests.

On 12 October, former Defense Minister Mykhailo Fedorov said he and Pavlo Yelizarov, commander of Lasar’s Group, had created a new interceptor with troops and engineers. He said it downed two Geran-5s headed for Kyiv.

Crews from Lasar’s Group, which Fedorov has called a National Guard special unit, flew those combat tests, he said. Separately, Fedorov reported in August that a Ukrainian jet interceptor with a top speed above 600 km/h had entered combat testing.

‘From liabilities to goldmines’: refineries eye record profits from diesel shortage

Firms turning crude oil into the ‘workhorse’ fuel stand to gain most despite economic fallout from record prices

Days after Donald Trump announced a deal to import Russian diesel into the US in an effort to lower soaring pump prices, the world’s energy watchdog has warned that the global fuel shortage will drag into 2027.

Trump’s temporary sanctions reprieve was criticised for offering “too little, too late” to temper the sky high pump prices triggered by the shutdown of war-damaged refineries in the Middle East and Russia – once the world’s second-largest diesel exporter behind the US.

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© Photograph: Martin Meissner/AP

© Photograph: Martin Meissner/AP

© Photograph: Martin Meissner/AP

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