France and Germany agreed a provisional trade-off on EU auto rules.
Why it matters: The proposal could give automakers more flexibility beyond 2035 while tying that flexibility to stronger European-content rules. It puts Europe’s industrial competitiveness and climate commitments on the same negotiating track.
- The provisional understanding was reached on October 15, 2026.
- The proposal could allow some plug-in hybrids, range extenders, mild hybrids or combustion engines after 2035, subject to final legislation.
- A Made in Europe definition would cover the EU’s 27 members and potentially Britain through an opt-in mechanism.
- The European Commission’s 2025 Automotive Package proposed a 90% tailpipe-emissions reduction target from 2035, versus the existing 100% framework.
France and Germany have reached a provisional understanding that links looser EU car-emissions requirements with stronger European-preference rules for the auto industry, according to France 24.
The compromise reflects a trade-off. Germany has pressed for more flexibility in the transition away from new fossil-fuel vehicles, while France has sought tighter European-content and industrial-preference rules, according to Le Monde.
The proposed flexibility could cover continued sales of some plug-in hybrids, range-extender vehicles, mild hybrids or combustion-engine technologies after 2035. The precise legal mechanism remains unsettled, and the final text could instead rely on compensation mechanisms or other compliance tools, according to Reuters reporting syndicated by AOL.
In return, the proposal would define “Made in Europe” as the EU’s 27 countries, with an opt-in path for European partners that were in the EU internal market on January 1, 2020. That provision is aimed at including the United Kingdom, but would be conditional on reciprocity and regulatory or trade-policy alignment, including cooperation on measures targeting Chinese electric vehicles, Le Monde reported.
The agreement is not EU law. It is a Franco-German negotiating position for talks involving member states, the European Commission and the European Parliament.
The Commission’s Automotive Package proposed a 90% tailpipe-emissions reduction target from 2035, with the remaining 10% potentially addressed through EU-made low-carbon steel, e-fuels or biofuels. The existing framework provides for a 100% fleet-average CO2 reduction for new cars and vans.
By the numbers
- 90% - proposed EU tailpipe-emissions reduction target for new cars from 2035
- 100% - existing fleet-average CO2 reduction framework for new cars and vans from 2035
- 14.5% - share of new-car registrations represented by zero-emission vehicles in the EU, Norway and Iceland in 2024
Yes, but: The proposal does not change EU law, and its effect on emissions depends on the final treatment of hybrids, combustion engines, e-fuels, biofuels and compliance rules. The United Kingdom has not been confirmed as accepting the proposed reciprocity conditions.
What's next: The proposal must be negotiated with other EU member states, the European Commission and the European Parliament. The final legal text and the positions of other major automotive countries remain unresolved.