France and Germany seal EU car deal that could give Britain 'Made in Europe' special status

France and Germany struck a deal on Friday to soften the EU's effective ban on new combustion-engine cars from 2035, tying the revision to strict new rules favouring European-made products. The agreement, reached on the sidelines of an EU leaders' summit in Brussels, would require carmakers to cut fleet-average CO2 emissions by 90% by 2035 with no offsetting permitted. It still needs backing from other EU member states and the European Parliament to become law.

Britain could be treated as a trusted partner under the 'Made in Europe' scheme, covering countries that were part of the EU internal market on 1 January 2020.

Under the deal, 70% of car components excluding batteries would have to be produced in Europe, targeting Chinese rivals whose EU market share has nearly doubled to 10.7% in a year.

German Chancellor Friedrich Merz called it 'a good day for car drivers and for jobs in Germany, France and Europe', posting the deal on X as 'an investment signal to industry'.