France and Germany agreed on a deal easing EU emissions rules for carmakers, offering relief amid high costs and Chinese competition. The pact loosens CO2 standards favored by Germany while defining "Made in Europe" rules backed by France. German Chancellor Friedrich Merz declared the effective ban on fuel-burning cars "is history." Shares in Volkswagen, Stellantis, and Renault gained after the accord, with VW and Stellantis up 2.8% and BMW rising 3.5%.
Stellantis called it an important step toward finalizing the European automotive package. The deal aims to rebalance competition with Chinese firms like BYD and SAIC Motor's MG brand, which have pressured European automakers to cut jobs and close sites. France and Germany also opened subsidy access to the UK under "Made in Europe" rules, but only if Britain limits Chinese car imports.
Renault CEO Francois Provost urged the UK to join the European ecosystem. Toyota had earlier asked that trusted partners like Japan and Turkey be included, while Renault CEO Fabrice Cambolive said he needs to assess the impact on Morocco and Turkey.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing