Franco-German Car Deal A ‘Historic Mistake’ That Weakens Climate Ambition And Europe’s Car Industry

France and Germany agreed to support weaker EU car CO₂ standards and weaker IAA requirements. The proposal would slow the required shift toward electric cars and loosen rules governing European content in batteries and strategic components. T&E calls the agreement a “historic mistake” because it could weaken both climate ambition and Europe’s auto industry.

Under the proposal, only 10% of battery cells would need to be sourced in Europe during 2028–2029. That threshold would rise to 20% in 2030–2031. Cars assembled in the EU with Chinese-made batteries could still receive a “Made-in-EU” label.

T&E says the deal could reduce the share of electric cars supplied from 57% under today’s target to 43% in 2030. It warns that weaker rules would reduce demand for European batteries, threaten jobs, and make it harder for European manufacturers to compete with Chinese rivals.

EU car CO₂ standards are rules that limit the average carbon dioxide emissions of new cars. In practice, tighter standards encourage automakers to sell more low-emission and electric vehicles. The article presents these standards as an important tool for maintaining Europe’s climate progress and helping its carmakers compete in the global electric-vehicle market.

IAA requirements, as described here, concern “Made-in-EU” content in batteries and strategic components such as cathodes. They can require manufacturers to source battery cells or other important parts from Europe. A higher European-content requirement creates stronger demand for local suppliers and battery factories.

The proposal would weaken both systems. It would reduce the expected electric-car supply in 2030 and permit low European sourcing levels. The article warns that such rules would undermine European gigafactories, jobs, strategic autonomy, and the supply of affordable electric cars.

T&E estimates that the proposed deal would reduce the share of electric cars supplied from 57%, based on today’s target, to 43% in 2030. That is a 14-percentage-point reduction. The change would mean fewer electric models are required or expected to reach the market, weakening the pace of Europe’s transition away from combustion-powered cars.

The battery rule would also set a very low European-content floor. Just 10% of battery cells would need to come from Europe in 2028–2029. The requirement would rise to 20% in 2030–2031. These thresholds contrast sharply with the article’s figure that more than 50% of cells used in electric vehicles sold in the EU were already produced in Europe in 2025.

The result could be weaker demand certainty for European factories. T&E says 164 GWh of capacity could be at risk in 2027, rising to 254 GWh in 2030.

Weaker CO₂ standards would slow the shift from conventional cars to electric vehicles. The article says the proposed deal could reduce the 2030 electric-car supply share from 57% to 43%. That would limit emissions progress while drivers face record fuel prices and electric cars are setting sales records.

Consumers could see fewer affordable electric models because manufacturers would face less pressure to expand EV supply. At the same time, low European sourcing requirements could remove demand certainty for battery factories. T&E estimates that 164 GWh of capacity could be at risk in 2027 and 254 GWh in 2030.

Europe’s industrial position could also weaken. The article says the deal would jeopardize the European battery supply chain and make it harder for EU carmakers to compete with Chinese rivals. It warns that jobs, strategic autonomy, and global competitiveness could suffer.

A “Made-in-EU” label can influence where manufacturers buy batteries and components. If European assembly alone is enough for the label, automakers could use Chinese-made batteries while still presenting the finished vehicle as European. The article calls this a scandal because it weakens the purpose of European-content rules.

The mechanism is straightforward. European battery factories need dependable orders to justify construction and expansion. If carmakers can meet the proposed rules with batteries made in China, they may have less reason to purchase European cells or support local cathode suppliers. That reduces demand across the battery supply chain.

T&E warns that the impact could reach jobs and investment. It says low sourcing thresholds would destroy demand certainty for European gigafactories, putting 164 GWh of capacity at risk in 2027 and 254 GWh in 2030. Europe’s strategic-autonomy plans could also be undermined.

The alternative is to create firm, growing demand for batteries made in Europe. T&E calls for effective “Made-in-Europe” measures and ambitious electrification targets for large company-car fleets. Large fleets could buy many electric vehicles, giving battery producers dependable customers and helping more models reach drivers.

Sourcing requirements could also be raised. Instead of requiring only 10% of cells in 2028–2029 and 20% in 2030–2031, policymakers could set stronger requirements for European cells and strategic components such as cathodes. Those rules would encourage automakers to build purchasing relationships with European suppliers.

The article says these policies could ensure growing demand for European battery production from 2027. Stronger and earlier requirements would give gigafactories more certainty, support jobs across the supply chain, and reinforce Europe’s strategic autonomy. They could also help European carmakers compete as electric vehicles expand globally.

The battery supply chain begins with raw materials and processing. Those materials become components such as cathodes, which are combined with other parts to make battery cells. Cells are assembled into battery packs, then installed in electric vehicles. Car assembly and consumer purchases complete the chain by creating demand for more batteries.

The article focuses especially on European cells and cathodes. If carmakers are required to source these components locally, European suppliers receive clearer demand signals. If they can use Chinese batteries while receiving a European label, demand may shift away from local factories. That affects manufacturers, component suppliers, workers, and investors.

Predictable rules are crucial because gigafactories require large, long-term investment. The article says weak requirements could put 164 GWh of capacity at risk in 2027 and 254 GWh in 2030. Stronger fleet targets and higher sourcing requirements could provide the certainty needed for expansion.