French President Emmanuel Macron announced that a grand bargain between France and Germany on EU car policy is "imminent", aimed at pushing back Europe's phaseout of combustion engines and boosting car production to counter Chinese competition. The agreement, expected within hours or days, would dilute Europe's climate ambitions further while giving domestic manufacturers more leeway to continue selling combustion engines longer. Germany is expected to secure easing of the EU's 2035 combustion engine ban, allowing up to 10% of new car sales to remain combustion-powered without requiring low-carbon fuels.
France would gain German support for public subsidies and contracts for electric vehicles and batteries to be restricted to EU-based manufacturers. The deal needs ratification by other EU member states and the European Parliament, and could exclude trade partners like the UK from the Made in Europe scheme.
Source: Financial Times Companies · Summarized by HeadlinesBriefing