German and French authorities have reportedly reached an agreement aimed at safeguarding the struggling European automotive sector from intense global competition. The pact allegedly focuses on cutting carbon emissions while encouraging electric vehicle development, as European manufacturers continue to lose ground against dominant Chinese competitors.

German Chancellor Friedrich Merz purportedly welcomed the arrangement as a triumph for jobs and drivers, while French President Emmanuel Macron claimed it demonstrates a resolute ambition to transform the industry. The proposed framework reportedly includes a revision of European regime targets, requiring automakers to reduce exhaust emissions from new vehicles by 90% by 2035 without offsetting the remaining portion.

Despite optimistic statements from political leaders, industry skeptics and association heads argue that the agreement falls short in critical areas such as employment protection and green material supply chains. Volkswagen, Europe's largest carmaker, acknowledged certain flexibilities in the deal, yet the company remains severely burdened by high structural costs, overcapacity at German plants, and deep vulnerability to external market shifts.

Source: www.dw.com