France and Germany want more detailed “Made in Europe” rules for electric cars, and want them split off from the rest of the EU’s flagship industrial law.
The Franco-German deal, agreed after months of haggling on the margins of the EU summit in Brussels late on Thursday (15 October), says both files should then be adopted “as fast as possible and simultaneously”.
That would split the most fought-over part from the rest of the Industrial Accelerator Act (IAA), which also sets “Made in EU” and low-carbon requirements for steel, cement, aluminium and clean-tech products such as batteries and solar panels.
Paris hopes the new car definition will serve as a benchmark for the rest of the IAA, which sets “Made in Europe” rules for steel, cement, aluminium and clean energy technologies.
But this still has to be negotiated with other member states, people familiar with the talks said.
“We are driven by a clear ambition: to successfully transform our automotive industry while upholding our climate goals and our production in Europe,” said French president Emmanuel Macron on social media, announcing the deal.
“This is an investment signal to industry,” said German chancellor Friedrich Merz.
Made in Europe
The paper comes as Ireland, which holds the EU’s rotating six-month presidency, is wrapping up a third compromise text on the industrial plan, which Irish officials hope will reach final agreement by mid November.
Publicly, Paris and Berlin said on Friday that their car deal will not affect climate targets and that their course “remains unchanged”.
But the paper behind the deal shows the trade-off that’s been made. Berlin accepted France’s demand for stricter “Made in Europe” rules that apply to fewer countries, while Paris agreed to looser emission rules for carmakers, as Germany had wanted.
To count as “Made in Europe”, a car would have to clear thresholds that tighten over time, and only cars meeting these rules could be bought, leased or rented with public subsidies, or bought by public authorities.
From 2028, the car must be assembled in Europe, with at least 70 percent of total value creation in components – excluding the battery.
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