France and Germany issue major announcement on ‘future of European automotive’

The joint statement outlines that it remains committed to ensuring that production stays in Europe amid a growing threat from Chinese automotive brands.

It stated that a new comprehensive package of measures would combine the European decarbonisation pathway, while acknowledging that regulatory flexibility is necessary.

The European Union announced last year that it had confirmed a new Automotive Package to support the transition away from petrol and diesel vehicles and towards a more sustainable future.

This included requiring carmakers to comply with a 90 per cent tailpipe emissions reduction target from 2035 onwards.

Automakers are required to compensate the remaining 10 per cent through e-fuels, biofuels and low-carbon steel made in the EU.

At the time, the EU said this would allow for EVs and hydrogen sales to advance, while retaining hybrids, plug-in hybrids, range extenders, and internal combustion engines to play a role beyond 2035.

It also outlined that car manufacturers would be able to benefit from “super credits” for small and affordable electric vehicles made in the European Union.

However, fresh reports suggest that the proposals set out by France and Germany would retain the target at 90 per cent without needing to compensate the final 10 per cent.

The EU has come under sustained pressure from manufacturers across Europe to allow for exemptions in certain areas.

Some legacy manufacturers have been accused of being slow to react to the transition to electric, while also facing greater competition from China.

The statement outlined that the transition to clean mobility must go hand-in-hand with investment, innovation and production.

It added: “This balanced approach will enable the European Union to pursue its climate objectives while strengthening the technological sovereignty, industrial base and international competitiveness of its automotive industry.

“Europe must be a continent that innovates, invests and produces, while protecting the climate and safeguarding jobs. This is the purpose of our commitment and the guiding principle of our joint approach.”

France and Germany clarified that they aim to work with European partners to come to an agreement on the new proposals.

The statement added that workers, industries and citizens deserved to have an automotive sector that remained resilient.

It concluded: “Our objective is clear: a competitive, innovative and decarbonised European automotive industry, producing in Europe and creating the jobs of tomorrow.”