Germany and France have agreed a joint position on EU car policy that waters down the planned 2035 combustion-engine phase-out even further than the European Commission proposed. Handelsblatt and AFP reported the deal on Thursday evening, citing Brussels diplomats and a draft agreement. Berlin and Paris have not officially confirmed the details.
According to AFP, carmakers would have to cut the CO₂ emissions of their new-car fleets by 90 per cent against 2021 from 2035, but would no longer have to offset the remaining 10 per cent. Anyone who meets the fleet average could keep selling petrol and diesel cars. The Commission had also proposed 90 per cent in December 2025, but tied the rest to offsets: up to 7 per cent through low-carbon steel made in the EU and up to 3 per cent through sustainable fuels.
The reporting contradicts itself on one point. In early October, Handelsblatt and Tagesspiegel spoke of a target of only 80 per cent. Which figure is in the paper is unclear from what has been published; we treat 90 per cent without an offset obligation as the current version because it is the most recent.
A trade: combustion engines for “Made in Europe”
The deal follows a clear pattern. Chancellor Friedrich Merz (CDU) gets what he has demanded for months: a softer 2035 target than the Commission’s and no binding electrification quotas for large company fleets, which the Commission had planned from 2030.
President Emmanuel Macron gets his industrial-policy line: state purchase premiums and public contracts would go only to cars built in Europe, and a growing share of batteries and key components would have to be European-made. Both countries also want the UK to count as “made in Europe”. Berlin had earlier resisted strict origin rules because Economy Minister Katherina Reiche (CDU) did not want to endanger trade ties with Turkey, Vietnam and Morocco.
France had led a group of seven states opposing any loosening, including Spain and the Netherlands. Without Paris, Tagesspiegel notes, that group no longer holds a blocking minority in the Council.
Nothing is decided yet
This is a political signal, not a law. Parliament and the Council must approve the Commission’s package, and after the Franco-German deal they are likely to move it closer to industry’s position. Even in Berlin the path is not clear: Environment Minister Carsten Schneider and Finance Minister Lars Klingbeil (both SPD) wrote to Merz on Thursday offering 95 per cent plus 5 per cent offset through European green steel. “We reject further compensation below 90 per cent,” the letter says. The reported line sits exactly on that red line; whether the SPD will back it is open.
Our assessment, with moderate confidence: for car buyers, 2035 will change less than feared or hoped. A ban in the strict sense would effectively disappear, and what matters will be how fast electric cars get cheaper. The origin rule may prove more tangible: if national purchase premiums were tied to European production, Chinese-built EVs would be excluded. A final law is unlikely before 2027.
Sources: t-online/AFP, Handelsblatt, Reuters/onvista, Tagesspiegel, European Commission
