France and Germany have reached an agreement that could exclude cars manufactured in Morocco from preferential European Union subsidies and public procurement programs, potentially disadvantaging Renault and Stellantis factories that supply the European market, according to European automotive industry reporting and an analysis by the Jacques Delors Institute.
The agreement, announced on October 16, would favour vehicles produced within the EU and certain European partner countries, leaving Morocco and Turkey outside the proposed definition of “Made in Europe.”
The distinction matters because the proposed rules could determine which manufacturers benefit from public financial support as Europe seeks to strengthen its automotive industry against growing Chinese competition. They would not prohibit Moroccan-made vehicles from entering the EU market.
The Franco-German compromise links two previously contested issues: European manufacturing preferences and the bloc’s 2035 emissions requirements for new cars.
Germany secured French support for relaxing the proposed emissions target to a 90% reduction, while France obtained German backing for a narrower definition of European production, according to Agence Europe.
The agreement is intended to influence negotiations over the Industrial Accelerator Act, proposed by the European Commission in March.
The legislation would introduce European-content and low-carbon requirements into selected public procurement contracts and subsidy programmes, including those covering vehicles, steel and clean technologies.
Morocco’s potential exclusion has raised questions about its place in European automotive supply chains.
Renault operates major factories in Tangier and Casablanca, while Stellantis manufactures vehicles in Kenitra. Their production networks link Moroccan facilities with European manufacturers and suppliers.
Guillaume Duval, an adviser to the Jacques Delors Institute, criticized the compromise in an October 27 analysis, arguing that excluding Morocco and Turkey could undermine Europe’s efforts to develop competitive production networks closer to home.
Duval said European manufacturers need lower-cost neighbouring production bases to compete with Chinese companies, particularly in markets outside Europe.
The exclusion could also conflict with the EU’s stated objective of strengthening economic integration with Mediterranean partners, he argued.
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