A new agreement between France and Germany has set off alarm bells across Europe’s automotive sector. The two countries’ governments have reportedly struck a deal that would allow electric cars assembled in the EU—but fitted with batteries produced in China—to be labeled as “Made-in-EU.” The move, which weakens the EU’s car CO₂ standards and the Industrial Accelerator Act (IAA) requirements, has been branded a “historic mistake” by Transport & Environment (T&E), a leading European NGO focused on sustainable mobility.
Anna Krajinska, senior director at T&E, didn’t mince words: “German and French political leaders claim they are acting to save jobs, but this may well be the deal that buries Europe’s auto industry.” She warned that setting such a low bar “will destroy Europe’s strategic autonomy plans once and for all,” arguing that the new rules jeopardize the entire European battery supply chain. T&E is now calling on the European Parliament and EU governments to resist any further weakening of car CO₂ standards and to support effective “Made-in-Europe” requirements, along with strong electrification targets for large corporate fleets beginning in 2027. The goal: ensure sustained demand for European-made batteries and protect jobs at home.
Concerns for Jobs and Industry
The heart of the controversy is the labeling decision. Allowing electric vehicles assembled in Europe, but using Chinese batteries, to qualify as “Made-in-EU” is seen as a blow to the continent’s fledgling battery sector. Critics argue this loophole will undercut local manufacturers and cost jobs across the supply chain, from mining to battery cell production and beyond. T&E blasted the agreement, calling it a “scandal” and warning that the CO₂ standards and the IAA are the “last chance to halt the decline of Europe’s auto manufacturing.”
Wider Political and Economic Impacts
There’s a broader political angle, too. The UK government, for its part, has pledged to ban new petrol and diesel car sales by 2030. Meanwhile, France and Germany’s proposal would allow UK automotive firms to be included in the EU’s protectionist Industrial Accelerator Act—a move welcomed by British officials, but not without reservations. Andy Burnham, a prominent UK politician, cautioned that the “Made in Europe” scheme poses “risks to British manufacturing,” and promised to raise concerns with EU leaders.
At stake is Europe’s ambition for a zero-emission, strategically autonomous automotive industry. T&E’s vision is clear: a mobility system that’s affordable, clean, and doesn’t sacrifice local jobs or industrial sovereignty in the name of short-term gains. Whether EU lawmakers will heed these warnings remains to be seen as the debate over the continent’s electric future heats up.
