The European Commission has proposed changes to EU public procurement rules that would give authorities greater flexibility to exclude companies from non-EU countries from certain tenders. The draft legislation is aimed at modernizing procurement procedures and strengthening European industrial resilience, with Chinese companies such as BYD cited as an example in discussions over electric bus procurement.
The proposal still requires approval from the European Parliament and EU member states. If adopted, the revised rules would affect public tenders covering areas including battery-electric buses, charging infrastructure, municipal electric vehicle fleets and services such as waste management.
European Preference In Public Tenders
The Commission wants public authorities and publicly controlled companies to have more scope to consider strategic factors when awarding contracts rather than relying primarily on price.
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A central element is the proposed introduction of “European preference” considerations. The measures are intended to ensure public spending supports security, supply-chain resilience and fair competition while reducing strategic dependencies and strengthening industrial capacity within Europe.
The proposed criteria would not automatically become mandatory for every tender. Instead, they would provide authorities with a legally supported option to incorporate European preference into procurement decisions.
The Commission also wants quality criteria to carry greater weight, reducing the emphasis on purchase price alone.
Séjourné Points To BYD Electric Buses
EU Commissioner for Industrial Strategy Stéphane Séjourné cited BYD’s electric buses while presenting the proposal.
“After the adoption of this reform, it won’t be because of the European commissioner if there are BYD buses in Berlin,” Séjourné said.
Berlin’s public transport operator BVG does not currently operate electric buses from BYD. Séjourné’s comment appears to refer to Deutsche Bahn’s order for around 200 electric buses from the Chinese manufacturer at the end of 2025.
The order generated political debate in Germany, with Finance Minister Lars Klingbeil criticizing the decision and calling for greater consideration of domestic production.
Procurement Already Considers More Than Price
European public procurement rules already allow contracting authorities to evaluate factors beyond the initial purchase price.
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In the Deutsche Bahn tender, for example, criteria included energy consumption, maintenance requirements and other quality factors. The assessment also considered production locations, service network coverage and the environmental, economic and social responsibility of potential suppliers.
BYD secured only about 5% of the contract volume, while German manufacturer MAN received the majority.
The proposed changes would nevertheless make it easier for authorities to incorporate strategic considerations and potentially restrict participation by companies from countries outside the EU.
China Would Not Receive Equivalent Access
The Commission also plans to establish a list of countries whose companies would receive treatment comparable to EU companies in public procurement because those countries provide European businesses with access to their own tenders.
The United Kingdom and United States are expected to be included on the list under the current proposal. China is not expected to receive equivalent treatment.
“This is a strategic lever – and at a time when, in particular, China, India, the United States, and all the major powers are using this lever as part of their own industrial and economic strategies,” Séjourné said.
The approach reflects a broader EU effort to use public spending as an industrial policy instrument while reducing exposure to external supply chains.
BYD’s European Production Complicates Exclusion
The situation involving BYD illustrates the potential complexity of applying the new rules to Chinese-owned companies operating inside the EU.
BYD has manufactured electric buses for the European market at its plant in Komárom, Hungary, since 2017. The facility has created hundreds of jobs, primarily for EU citizens, and operates through a Hungarian subsidiary.
The approximately 200 electric intercity buses ordered by Deutsche Bahn at the end of 2025 are also scheduled to be manufactured at the Hungarian facility.
This means that a Chinese-owned manufacturer and a product manufactured in China cannot necessarily be treated as the same under the proposed procurement framework.
Company Origin And Product Origin Differ
The draft rules distinguish between the origin of a company and the origin of a product. Under the current proposal, an electric bus manufactured in Hungary would not automatically be excluded simply because its parent company is Chinese.
A key consideration could instead be whether the bus qualifies as an EU-origin product under EU customs rules.
Public authorities could also gain the ability to establish requirements concerning the proportion of components that must originate within the EU.
The final impact of the reform on Chinese electric vehicle and charging suppliers will therefore depend on the detailed legislation adopted by EU institutions and how individual contracting authorities apply the new procurement options.