Five days ago the fight in Brussels was over the conditions attached to a 90% CO2 target for 2035. According to reports in Handelsblatt and the Frankfurter Allgemeine Zeitung, Germany and France have now agreed to move the number itself.
What is being reported
Chancellor Friedrich Merz and President Emmanuel Macron have reportedly settled a joint position on the EU's "auto package". EU diplomats quoted by the German press describe the "grosse Linien" — the broad outlines — as agreed, with detail still being negotiated. Neither government has published the position, and electrive's own headline on 7 October 2026 hedges it as "wohl": apparently.
The substance, as reported, is a further weakening of ten percentage points without compensation on top of what the Commission already proposed. Taken together with the compensation mechanisms already in the package, Handelsblatt's reading is that the 2035 reduction would come out at at least 80% rather than 90%.
| Reduction vs 2021 | Fleet equivalent | |
|---|---|---|
| Law adopted in 2023 | 100% | 0 g CO2/km |
| Commission proposal, Dec 2025 | 90% | 11 g CO2/km |
| Reported Franco-German position | About 80% | Higher still |
The second change is to timing. The Commission would let manufacturers average their 2030 interim target across three years. Berlin and Paris reportedly want five.
The trade
Each capital is giving up something it had been defending. Macron drops his resistance to softening the fleet limits. Merz drops his opposition to stricter "Made in Europe" rules — stricter, the reports say, than the Commission had originally intended.
That second half is the one to watch, because it is the same pairing that appeared in the Franco-German letter on cutting third countries off from the single market two days earlier. Two files, one bargain: Berlin gets a looser emissions rule, Paris gets European content requirements.
Why a European Tesla buyer should care
Tesla has no combustion fleet to bring into compliance, so a weaker target does not cost it anything directly. It costs it revenue.
Europe's CO2 credits only recently acquired a visible price, and the pool has been thinning — Porsche left Volkswagen's pool for XPeng's in August. Every percentage point shaved off the 2035 obligation reduces what a manufacturer will pay for help meeting it. Eighty percent instead of ninety is a materially smaller market for the thing Tesla sells into that pool.
The "Made in Europe" half cuts the other way and is less comfortable. Europe's Model 3 is built at Giga Shanghai. Rules written to reward European content do not care that the company is American or that the Model Y comes from Grünheide; they ask where the car and its cells were made.
What is not settled
All of it. This is a reported bilateral position, not a legislative text. The European Parliament's transport committee has already pushed its vote back by about two weeks, with the plenary pencilled in for November, and the Council has not voted at all. Until Parliament and Council adopt something, the 100% requirement adopted in 2023 is still the law.
What changes with this report is the likely direction. The two member states that between them can shape the Council's position are no longer on opposite sides of it.