France and Germany reached a joint position on 15-16 October 2026 on the European Union’s automotive package and Industrial Accelerator Act, softening the 2035 CO₂ target while tightening rules on which vehicles can access public subsidies and climate-related advantages.
The compromise, still requiring broader EU approval, has direct implications for Morocco’s automotive industry, the Kingdom’s leading export sectors.
Under the deal, new cars sold in the EU from 2035 would need to cut average CO₂ emissions by 90% from 2021 levels, without the additional compensatory measures previously proposed by the European Commission.
This eases the earlier path toward a near-total phase-out of new combustion-engine vehicles.
In return, the two countries agreed to reserve purchase bonuses, public procurement preferences and certain climate advantages for vehicles that meet stricter “Made in Europe” criteria.
The geographical scope of these preferences covers the 27 EU member states, European Economic Area countries (Iceland, Norway and Liechtenstein), Switzerland and the United Kingdom under reciprocity conditions. Morocco was not included.
Content requirements discussed include assembly in qualifying countries and around 70% of components (excluding batteries) of European origin, along with minimum European battery content thresholds.
Europe accounts for 85% of Morocco’s automotive exports, according to Bank Al-Maghrib, with France, Italy and Spain among the top destinations.
Renault’s plants in Tangier and Casablanca together with Stellantis’ factory in Kenitra exported 457,000 vehicles in 2025.
Combustion-engine models produced in Morocco gain a longer window under the relaxed 2035 emissions pathway and face no new import bans.
Electric and plug-in hybrid vehicles built in the Kingdom, however, would be ineligible for the EU incentives reserved for European-produced cars.
This creates a competitive disadvantage relative to vehicles assembled inside the defined European perimeter, even though Moroccan exports remain free to enter the EU market under the existing association agreement.
Renault, Stellantis and Volkswagen had earlier advocated for a more flexible 70% European-content threshold that could have better accommodated their Moroccan operations.
The Franco-German position prioritizes production within the EU and closely aligned partners. The final EU legislation has yet to be adopted, so precise thresholds and any transitional arrangements remain subject to further negotiation in Brussels.