On 16 October 2026 Germany and France announced that they had reached an agreement to support the European automotive industry. The announcements were made in a coordinated statement and marked the latest step in a series of bilateral talks that have repeatedly highlighted the shared goal of strengthening Europe’s car makers.
The joint proposal centres on reducing carbon dioxide emissions from automobiles and accelerating the shift to electric vehicles. According to the outlines shared by Berlin and Paris, the plan includes measures to drive investment, foster innovation and expand production capacity within Europe. The proposal further calls for incentives that would encourage carmakers to invest in research, retool factories and scale up electric‑vehicle output.
Before the Franco‑German initiative, the European Commission had floated a different approach that would have permitted the sale of combustion‑engine vehicles after 2035. Germany, however, had signalled its preference for stricter rules, opposing the Commission’s more lenient stance. The new German‑French proposal therefore represents a shift toward tighter emissions limits, seeking to ensure that Europe takes a leading role in the global transition of the automotive industry rather than allowing a prolonged reliance on fossil‑fuel engines.
They are currently being discussed by the European Parliament and the Council of the European Union.
The brief specifies that the agreement includes a plan to require carmakers to cut exhaust emissions from new cars by 90 % by 2035. In practical terms, this would compel manufacturers to lower the average amount of CO₂ released per kilometre driven across their fleets. Meeting such a target would likely demand a rapid increase in the share of electric vehicles, alongside improvements in the efficiency of any remaining internal‑combustion models. The proposal also notes that the deal will need backing from other EU member states and the European Parliament before it can become binding law.
After the Franco‑German announcement, the proposals entered the ordinary EU legislative procedure. They are currently being discussed by the European Parliament and the Council of the European Union. Both institutions must approve the text for it to take effect. The brief emphasizes that without this joint endorsement the measures remain a statement of intent rather than enforceable regulation.
The brief’s framing section records a series of neutral and supportive stances. Both the German and French governments are described as neutral in seven instances each, while each also records a single supportive stance. Regarding industry, the European car industry is noted as supportive in two mentions, whereas European carmakers are described as critical in two mentions. In contrast, the Chinese car industry is characterised as critical in two mentions, while Chinese carmakers are recorded as supportive in two mentions. These counts suggest a mixed reaction: while some European manufacturers welcome the push for investment and innovation, others voice concerns about competitiveness, and analysts hold divergent views on the implications for Chinese firms.
The joint statement was accompanied by remarks from the two principal signatories. Friedrich Merz, representing Germany, said the deal was “an investment signal to industry” and later added that it was “an investment signal to the industry and a good day for drivers and jobs in Germany, France and Europe”. He also characterised the outcome as “a good day for car drivers and for jobs in Germany, France and Europe”. Emmanuel Macron, speaking for France, expressed hope that the Franco‑German dynamic would swiftly lead to an agreement with EU partners, stressing that it would protect jobs and industry. He also declared that “Europe must be a continent that is innovative, invests and produces, and protects the climate and our jobs”.
As of the announcements made on 16 October 2026, the Franco‑German plan exists as a set of proposals awaiting formal endorsement by the European Parliament and the Council. Its success will depend on securing the backing of a majority of EU member states and reconciling the varied positions of industry groups, ranging from supportive European sectors to critical carmaker factions and the mixed assessments of Chinese interests. Until those legislative steps are completed, the 90 % emissions‑reduction target and the accompanying incentives for electric‑vehicle investment remain a statement of intent rather than binding EU law.