Key facts
- Germany accepted stricter 'Made in Europe' requirements for the automotive industry.
- France backed Germany's push to relax the EU's 2035 combustion-engine car phase-out target.
- The 2035 emissions reduction target would be softened to 90%, with potential further leeway for alternative fuel investments.
- The agreement allows for the inclusion of the U.K. and Switzerland in 'Made in Europe' rules under certain conditions.
France and Germany announced on Friday, October 16, 2026, that they had reached an agreement on the EU's Industrial Accelerator Act, resolving months of disputes over "Made in Europe" rules and vehicle emissions targets. Under the compromise, Germany agreed to stricter local content requirements for the automotive sector, a key demand from France. In return, France supported Germany's proposal to soften the EU's 2035 target for phasing out new combustion-engine cars. The deal aims to balance climate objectives with strengthening the European automotive industry's technological sovereignty and competitiveness. The agreement was delayed from Thursday due to internal disagreements within Germany's coalition government, specifically from the Social Democratic Party, which had opposed the relaxed emissions targets. The deal also addresses concerns from the U.K. and Switzerland regarding potential inclusion in the "Made in Europe" provisions.