France and Germany are closing in on a deal that links two big EU fights: the future of combustion engine cars after 2035 and the 'Made in Europe' rules for subsidies and public procurement. Under the revised EU package, carmakers would need a 90% cut in tailpipe CO2 from 2035 instead of the original 100%. The remaining 10% could be covered by low-carbon EU steel and e-fuels or biofuels. The main disagreement is what counts as European. France wants strict local production inside the EU. Germany wants a broader 'Made with Europe' approach that would let some close trading partners qualify. The outcome will shape where batteries, motors, and other EV components are built, and it will also affect the 2027 rules of origin for electric vehicles. A Franco-German compromise would not finalize EU law. Parliament and other member states still have a say. But it could settle the two biggest disputes and give manufacturers a clearer signal before they commit to new plants and platforms.
