Brussels unveiled a draft plan aimed at reducing the auto sector’s reliance on US cloud and software providers. The proposal would require car manufacturers to store data on European servers and certify that critical tools come from EU‑based firms. European carmakers warned the measures could add tens of millions of euros to development budgets, eroding competitiveness for future models across the bloc.

Industry groups such as the European Automobile Manufacturers Association argued the rules ignore the integrated nature of modern vehicle software, where components from Silicon Valley firms coexist with home‑grown modules. They fear EU tech sovereignty mandates will force costly re‑engineering, delay model rollouts and push suppliers toward less efficient alternatives, squeezing profit margins across the supply chain in the EU market over the next year.

Policymakers say the drive protects data privacy and reduces geopolitical risk, but automakers stress that added compliance costs could be passed to consumers, inflating vehicle prices at a time when demand already feels pressure from electric‑vehicle transition. Cost increase concerns are likely to shape the next round of negotiations between Brussels and the industry, with lobbying intensifying in the coming months for both manufacturers and buyers.