Europe's transition towards electric vehicles could face another significant policy shift as France and Germany reportedly reach an agreement to weaken restrictions on new petrol and diesel cars.

The proposed compromise would allow manufacturers greater flexibility beyond 2035, potentially changing the European Union's plans to reduce transport emissions.

According to reports published on 8 October 2026, German Chancellor Friedrich Merz and French President Emmanuel Macron are preparing to present their agreement ahead of a European leaders' meeting in Brussels on 15 October. If approved, the changes could reshape the automotive industry and influence Europe's electric vehicle market for years to come.

What Have France And Germany Agreed?

The reported agreement centres on reducing the EU's emissions requirements for new passenger cars. Under existing legislation, manufacturers must achieve a 100% reduction in average tailpipe CO₂ emissions from new cars by 2035, compared with 2021 levels. The European Commission had already proposed relaxing that target to 90%, allowing some combustion-engine vehicles to remain on sale under specified conditions. France and Germany are now reportedly seeking a further reduction to 80%, without requiring manufacturers to compensate for the remaining emissions.

Such a change would create considerably more room for petrol, diesel and hybrid vehicles in the European market after 2035. However, the agreement remains a reported proposal and has not become EU law.

Why Did The Two Countries Compromise?

France and Germany previously held opposing positions on automotive regulations. Germany favoured greater flexibility for carmakers but resisted French proposals requiring publicly supported purchases to prioritise European-made products. France supported stronger domestic manufacturing requirements while opposing further reductions to the EU's vehicle emissions targets. The reported compromise would address both priorities.

Germany would support stricter Buy European provisions in public subsidies and procurement, while France would back weaker emissions requirements for new cars. The arrangement could resolve a months-long disagreement between two of the EU's most influential member states.

What Happens To The 2035 Target?

The European Commission's earlier proposal would permit certain combustion-engine vehicles to remain available after 2035 if manufacturers compensated for their remaining emissions. Possible measures included using low-carbon steel produced within the EU, synthetic fuels or biofuels. The latest reported Franco-German proposal would go further by reducing the emissions target to 80% without additional compensation requirements. This could allow manufacturers to continue selling a larger proportion of vehicles with combustion engines.

The countries are also reportedly seeking changes to the intermediate 2030 target. Instead of allowing manufacturers three years, from 2030 to 2032, to meet a 55% emissions reduction, the proposal would extend the compliance period to five years. Industry representatives believe the additional flexibility could help manufacturers avoid substantial financial penalties.

Why Is Germany Pushing For Change?

Germany's automotive industry is central to its economy, supporting major manufacturers including Volkswagen, BMW and Mercedes-Benz. However, European carmakers face growing competition from Chinese electric vehicle producers, alongside pressure from US tariffs and changing consumer demand.

German policymakers argue that manufacturers need more time to adapt their production strategies and remain internationally competitive. Greater flexibility could allow companies to continue developing hybrid and combustion-engine technologies while expanding their electric vehicle ranges.

What Does This Mean For Electric Cars?

Environmental organisations have expressed concerns that weaker emissions requirements could slow Europe's transition to electric mobility. Transport & Environment previously estimated that the Commission's 90% proposal could reduce battery-electric vehicles' share of new car sales in 2035 to approximately 85%.

The organisation also projected that cumulative car emissions between 2025 and 2050 could be around 10% higher than under existing regulations. A further reduction to an 80% target could create additional challenges for Europe's climate ambitions, although its precise effects would depend on the final legislation.

What Happens Next?

France's support could prove decisive because it previously joined six other countries in opposing further reductions to the emissions targets. A change in its position could help secure the necessary majority among EU member states.

Nevertheless, any revision would still need to pass the relevant EU legislative procedures. The debate reflects the difficult balance between protecting industrial competitiveness, supporting automotive employment and meeting Europe's goal of climate neutrality by 2050.

For manufacturers and consumers, the outcome could determine how quickly electric vehicles become the dominant choice across Europe's new-car market.