EU May Loosen EV Rules for Third Time in Two Years

France and Germany have reportedly reached an agreement to lower the required emissions reductions for European automakers, potentially marking the third easing of electric vehicle regulations in two years.

What Happened

According to Clean Energy Wire, the two nations have agreed to reduce the current emissions reduction target from 90% to 80%. The proposal also seeks to weaken interim targets, mirroring the "breathing room" measures granted to manufacturers in March 2025. Previously, France had opposed loosening car rules while Germany opposed France’s "Buy European" demands; however, the countries have now agreed to back each other’s proposals and will present them to the EU on October 15. While six other countries have opposed watering down car rules, the shift in France's stance suggests the necessary votes may be secured to pass the measure.

Context of Previous Rollbacks

This development follows a series of regulatory adjustments since the EU announced a target in 2021 to phase out new gas car sales by 2035 to meet climate neutrality goals. In March 2025, the EU reduced short-term emissions reduction requirements to provide automakers with flexibility. Nine months later, the EU rolled back targets further, allowing automakers to continue producing polluting vehicles after 2035 by requiring a 90% emissions reduction rather than 100%, a target that included optional credits for e-fuels.

Why It Matters

The proposed changes come as Chinese EVs gain rapid market share in Europe due to competitive pricing and production speed, while European automakers reportedly struggle with EV investments and cancel models. The decision could also impact trade relations outside the EU; Europe is currently seeking to require the UK to place a tariff on Chinese EVs as a condition for joining the "Buy European" agreement. The UK has not had tariffs on Chinese EVs, a policy that has contributed to BEVs becoming the most popular powertrain in the country.

The Bottom Line

If approved, the adjustment would represent another shift in European regulatory targets, occurring amidst record heat waves in Europe and continued growth in EV sales globally.