France is likely to join Germany. Both countries want to further weaken the ban on sales of new cars with combustion engines

France and Germany have agreed, according to media reports, to push for a more significant easing of European rules on emissions from new cars than the European Commission has proposed. If France abandons its previous opposition, this could pave the way for a majority of member states to further roll back the ban on combustion engines after 2035. At stake is not only the future of the European automotive industry, but also the pace of transport electrification. The Czech market is growing, with the number of new battery electric vehicles increasing by a third year on year in the first eight months of this year.

One concession for another

According to German media, the agreement involves an exchange of political support. France is set to back Berlin’s demands for more flexible rules for carmakers, while Germany will support French demands for “Buy European” rules. These would give preference to products made in the EU in public procurement and when awarding subsidies.

Until now, the two countries have been on opposite sides of the dispute. Germany called for greater flexibility for carmakers but opposed European preferences in public support. France advocated more protectionist rules and opposed any further weakening of emissions targets. According to reports, its shift to Germany’s side could break up the blocking minority it had formed with Sweden, Spain, Denmark, Luxembourg, the Netherlands and Portugal.

Chancellor Friedrich Merz and President Emmanuel Macron are expected to present the agreement ahead of the EU leaders’ meeting in Brussels in October. The information available so far points primarily to a shared intention by the two governments to push for changes; the final form of the rules will depend on negotiations within the Union.

Commission proposed 90%, Paris and Berlin want 80%

At the end of last year, the Commission proposed that CO₂ emissions from new passenger cars and vans be cut by 90 percent by 2035 compared with 2021, instead of the original target of eliminating emissions entirely. Manufacturers could offset the remaining emissions, for example by using low-carbon steel made in Europe or synthetic fuels and biofuels. The proposal would thus allow some hybrid cars and other vehicles with combustion engines to continue to be sold.

The Franco-German proposal would go further still. According to media reports, the emissions reduction target would fall to 80 percent, and carmakers would not have to offset the remaining ten percent. The easing would also apply to the interim target for 2030. Instead of three years, manufacturers could have five years to achieve a 55-percent reduction in emissions compared with 2021.

Such a change would give carmakers more room to continue selling vehicles with combustion engines and reduce the risk of fines for failing to meet emissions limits. The German government says the changes are needed to protect jobs in the automotive industry, which faces competition from Chinese manufacturers as well as US tariffs. At the same time, looser rules could change the economic conditions that carmakers use to plan investments in new models and production capacity.

There could be fewer electric cars, but no precise estimate is available

Even the Commission’s proposal, which preserves a larger part of the original emissions target, does not guarantee that electric cars will dominate the market in 2035, according to the Transport & Environment organisation. Its analysis estimated that battery electric vehicles could account for around 85 percent of new registrations. According to the organisation, car emissions between 2025 and 2050 would be roughly a tenth higher than if the current rules remained in place.

Sources do not provide a specific estimate of the share of electric vehicles under the even more lenient option proposed by France and Germany. However, it can be expected that greater scope for combustion-engine and hybrid cars could further reduce the share of all-electric cars compared with the Commission’s proposal. The eventual outcome will also depend on the range of vehicles available, their prices and customer decisions.

The dispute is not just about the technical design of emissions limits. Predictable rules are important to electric vehicle manufacturers and their suppliers because they use them to plan long-term investments. Easing the targets may offer short-term relief to part of the established industry, but at the same time weaken confidence that demand for electric models will grow quickly enough.

Czech market picks up pace despite uncertain rules

In Czechia, 11 665 new battery electric passenger cars were registered from January to August this year, 32% more year on year. Their share of new passenger car registrations rose from 5,5 to 7 % year on year and reached 8,45 % in August alone. The Czech passenger car fleet also surpassed 77 thousand electric vehicles.

Imports of used electric vehicles are also growing. In the first eight months of the year, 8 930 arrived in the country, 68 % more than in the same period of the previous year. Their share of imported used passenger cars rose from 5,4 to 8,3 %. The figures show that electrification in Czechia is progressing not only through new vehicles, but also thanks to more affordable used electric cars.

A European easing of the rules would not in itself halt this trend, but it could change the range of models available and the speed at which carmakers shift investment towards electric vehicles. For the Czech market, it will therefore be important whether the expanding range of electric cars translates into more affordable prices and whether registration growth continues even without a significant expansion of support.