France and Germany have agreed a joint approach to changing the EU’s 2035 car emissions rules, alongside a proposal that could give British automotive factories access to future “Made in EU” measures. It is a significant shift in the negotiations over Europe’s car industry, although the existing legislation remains in place.
Under the compromise, manufacturers would face a 90% reduction in average new-car CO₂ emissions from 2035, measured against 2021 levels, without an additional requirement to compensate for the remaining 10%. The arrangement was reported by Reuters on Friday 16 October. Paris and Berlin have also opened the door to special treatment for UK automotive production, provided Britain meets conditions linked to trade and investment policy.
The joint Franco-German government statement sets out the shared ambition: lower emissions, greater flexibility for manufacturers and more investment in European production. The detailed targets and proposed UK conditions have emerged through reporting on the compromise. Neither has been adopted into EU law.
What the proposed 90% emissions target actually means
The EU’s current legislation calls for a 100% reduction in average CO₂ emissions from new cars by 2035. It is often described as a ban on new petrol and diesel cars, but the law is framed around the emissions of manufacturers’ new-car fleets. It does not prevent people from driving existing petrol or diesel vehicles or buying them second-hand.
In December 2025, the European Commission proposed lowering the 2035 tailpipe target to 90%. It wanted carmakers to offset the remaining emissions using qualifying low-carbon steel made in the EU or certain alternative fuels. France and Germany now support the 90% figure without that extra compensation.
The distinction could affect which cars manufacturers continue to develop after 2035. A fleet-wide emissions target leaves some room for models with combustion engines, including certain hybrids, alongside electric vehicles. It does not mean that exactly nine out of every ten new cars must be electric, and the final rules would determine how that flexibility works in practice.
For carmakers, the stakes are substantial. Battery factories, new vehicle platforms and model programmes take years to plan. More flexibility may help companies respond to uneven demand and production costs, but it could also change the investment signals for fully electric vehicles. The outcome depends on the legislation eventually agreed, not Friday’s announcement alone.
Why UK automotive manufacturing is involved
The other half of the agreement deals with where cars and their components are made. Proposed “Made in EU” requirements would give preference to qualifying products in certain publicly supported purchasing and investment schemes. France has pushed for tighter European-content rules, while Germany has argued that closely connected manufacturing partners should not be excluded.
Under the Franco-German approach, Britain could qualify as a trusted partner for automotive measures. That matters because British factories rely on parts, batteries and specialist components moving across the Channel, just as EU-based manufacturers rely on UK suppliers. Excluding either side from industrial incentives could complicate investment in supply chains that already operate as one network.
The proposal is not an unconditional offer. Precisely which vehicles, components or programmes might qualify has yet to be settled, and it would not restore the UK’s membership of the EU single market. The UK government told the House of Lords in September that it was pressing for an outcome that protects shared automotive production and that the EU’s Industrial Accelerator Act was still subject to amendment.
Chinese EV tariffs are part of the trade-off
The proposed special treatment could come at a price. According to the reported compromise, the UK would be expected to offer reciprocity and align with relevant EU trade-defence and investment measures. That could include stronger restrictions on imports of Chinese-built electric vehicles.
The EU already imposes additional duties on certain battery-electric cars made in China. Britain has not adopted equivalent additional duties, and bringing the two approaches closer together would require a separate UK policy decision. Any effect on British showroom prices would depend on which vehicles were covered and whether manufacturers absorbed some of the added costs.
There are competing priorities for the UK: preserving its place in European vehicle production while keeping a competitive market for imported EVs. Friday’s agreement does not settle that balance. It makes the conditions for British participation a central part of the wider negotiations.
What changes for British EV drivers?
Nothing immediately. The EU’s car-emissions legislation is separate from the UK’s own zero-emission vehicle mandate. Britain is reviewing its pathway to the 2030 and 2035 sales objectives, with a consultation open until 23 October 2026. The Franco-German announcement does not alter UK sales targets, vehicle tax, charging rules or current EV ownership costs.
It could still matter to future buyers. Changes to industrial support and trade protections can influence where carmakers build vehicles, source batteries and invest in new models. That may eventually affect the range of EVs offered in Britain and what they cost, but there is not yet enough detail to put a reliable figure on either outcome.
A separate risk is approaching sooner. Under the UK–EU trade agreement, stricter electric-vehicle and battery rules of origin are due from 1 January 2027. Cars that fail those requirements could lose tariff-free treatment when traded across the Channel. We examined that issue in our earlier report on potential UK EV price pressures from the 2027 rules. The new “Made in EU” proposal is a different policy and does not automatically remove the tariff risk.
The next decisions
France and Germany must now win support from other EU governments and the European Parliament. The final emissions rules, the definition of qualifying European production and the conditions attached to UK participation all remain open to negotiation. Automotive manufacturers will be watching those details closely as they make decisions about future factories and model ranges.
Tech Torque Verdict
The agreement gives carmakers a clearer indication of where France and Germany want EU policy to go, but it does not give the industry certainty yet. The change from a 90% target with compensation to one without it is substantial. So is the possibility of allowing British production into European industrial schemes, particularly if that comes with commitments over Chinese EV imports.
For drivers, there is no reason to reconsider an EV purchase or charging arrangement on the strength of this announcement. The real consequences will emerge from the final legislation, the UK’s response to any trade conditions and the separate battery-origin rules approaching in 2027.
