Franco-German Car Deal A ‘Historic Mistake’ That Weakens Climate Ambition And Europe’s Car Industry

France and Germany have agreed to loosen the European Union's car CO2 emissions rules and battery-sourcing requirements, a move the environmental group Transport & Environment calls a serious misstep. Under the deal, electric cars assembled in Europe could carry a "Made-in-EU" label even if their batteries come from China. The agreement would also cut the target share of electric vehicle sales in 2030 from 57 percent to 43 percent, and would require only 10 percent of battery cells to be sourced in Europe in 2028-2029, rising to 20 percent in 2030-2031, below the more than 50 percent already achieved in 2025.

This is a policy story about European car manufacturing and climate rules, not something that changes any rebate or program in the United States. But it matters for anyone watching the broader EV market, because a slower EU shift to electric cars and weaker support for European battery plants could affect which electric vehicle models and battery technologies get developed and how fast prices come down globally. Transport & Environment warns the deal puts European battery factory capacity at risk and could cost jobs in that supply chain, while also making it harder for European automakers to compete with Chinese EV makers.

The group is now urging the European Parliament and EU governments to reject further weakening of the standards. For now, the deal is not final, and there is no new rule, rebate, or deadline for homeowners to track. It is worth watching mainly as a sign of how fast, or slow, the global EV transition may move in the coming years.