Japanese Prime Minister Takaichi Sanae heads into a Tokyo summit with German Chancellor Friedrich Merz on October 28 carrying a direct demand: rewrite the European Union’s electric vehicle policy to stop shutting out Japanese-made cars.
The meeting lands just weeks after Germany and France unveiled a joint framework on October 16 designed to strengthen the EU’s electric vehicle sector. Central to that plan, a stricter “Made in Europe” standard that limits which vehicles qualify for subsidies and public procurement contracts. Under the proposed rules, only cars assembled within EU member states, or containing a set share of European-made components, would receive preferential treatment.
The agreement narrows the “built in Europe” classification to the 27 EU countries, with optional inclusion for European partner nations that belonged to the EU market as of January 1, 2020, such as Britain. Vehicles produced in Japan, South Korea, and other non-European countries would face exclusion.
The framework emerged from the European Commission’s Industrial Accelerator Act draft released in March, aimed at reducing EU dependence on Chinese products while favoring goods manufactured inside the bloc. However, the ripple effect hits Japanese automakers like Toyota, which could lose ground in the European market if the restrictions become law.
According to Japan’s Nihon Keizai Shimbun, Takaichi will press Merz to adjust the policy so Japanese-built vehicles receive the same preferential status. Japanese Economy, Trade and Industry Minister Akazawa Ryosei echoed that stance on October 20, vowing to push the EU hard for revisions.
Despite the diplomatic offensive, Japan’s trade ministry considers overturning the German-French agreement itself unlikely. Instead, officials plan to make their case during the EU’s “trilogue” phase, the closed-door negotiations involving the European Commission, the European Parliament, and the Council of the EU.
Nikkei notes that Japanese and German automakers have long cooperated through joint development programs. Excluding Japanese vehicles from EU incentives could strain those relationships.
Beyond electric vehicles, the leaders will discuss collaboration on artificial intelligence, cybersecurity, and defense equipment. A joint statement is expected to include cooperation between the two countries’ AI Safety Institutes, which evaluate AI system risks. Merz may also face questions about German participation in the Global Combat Air Programme, the next-generation fighter jet project led by Japan, Britain, and Italy.
