France is pushing the European Union to adopt “flexibility” in implementing stricter CO2 emissions rules for new vehicles, signaling support for its struggling domestic automakers as plant shutdowns and job losses mount. The timing is critical: France’s Finance Ministry announced Thursday that the country wants “technological neutrality” while maintaining the 2035 combustion engine ban, just days after Stellantis temporarily halted production at multiple European facilities.

The statement reveals the growing tension between Europe’s ambitious climate goals and the brutal economic reality facing traditional automakers. With Chinese competitors gaining market share and weak EV demand forcing plant closures, France is caught between environmental commitments and protecting hundreds of thousands of jobs.

Stellantis Crisis Drives Regulatory Push

The French position comes as Stellantis—owner of Peugeot, Citroën, Fiat, and Jeep—faces mounting operational challenges across Europe. The automaker temporarily shut down six plants in October across France, Italy, Germany, Poland, and Spain, citing weak demand for its models.

CEO Antonio Filosa met with Italian labor unions Monday, where he announced 400 new hires at the Mirafiori plant in Turin while warning that “having EU imposed such stringent targets in such a short period of time has displaced both supply and demand.” The executive told unions, “We need to change the rules and offer customers the full range of vehicles they want and can afford.”

But those 400 jobs pale next to the investment dollars flowing elsewhere. Stellantis pledged $13 billion to U.S. operations over the next four years, fueling European union concerns that investment is abandoning the continent. In the first nine months of 2025, Stellantis’ Italian output plummeted 32% to just 265,500 vehicles.

The Jobs Crisis Behind The Policy Shift

France’s call for flexibility isn’t just about regulatory fine-tuning—it’s about economic survival. According to Luc Chatel, a former minister who now heads the French automotive industry lobby group, a rigid application of the 2035 ban on combustion engines could put 3,500 companies and 350,000 automotive jobs in France at risk.

The French Finance Ministry statement emphasized the need for “clear incentives” favoring vehicles assembled locally as a way to protect those jobs. This push for domestic manufacturing preferences comes as Chinese automakers like BYD expand aggressively into Europe with competitively priced EVs, leveraging lower production costs and battery supply chain dominance.

France and Spain jointly presented a paper to climate ministers in Luxembourg this week supporting the 2035 zero-emission vehicle target while arguing that “the transition to electricity must not lead to the relocation of jobs to and increased dependence on third countries.”

Europe’s Competitive Crisis Deepens

The timing of France’s regulatory intervention reflects a broader European automotive crisis. Between January and July 2025, Stellantis sales dropped 8.1% in continental Europe while competitors Renault and Volkswagen posted gains. The company’s stock value crashed from €27 in April 2024 to €8.50 by September 2025.

European automakers face a perfect storm: strict emissions regulations forcing massive EV investments, uneven consumer demand for electric vehicles, and aggressive competition from Chinese manufacturers who control critical battery supply chains. EVXL has previously covered how BMW’s CEO warned that the 2035 ban could shrink the entire European auto industry.

The European Commission already granted some relief in July 2025, allowing automakers to average their CO2 compliance over 2025-2027 rather than meeting annual targets. But that flexibility hasn’t stopped the bleeding. Plants remain idle, workers face uncertain futures, and investment capital increasingly flows to more favorable regulatory environments like the United States.

What ‘Technological Neutrality’ Really Means

France’s push for “technological neutrality” is diplomatic language for keeping options open beyond pure battery-electric vehicles. While France and Spain oppose allowing plug-in hybrids after 2035—citing data showing significantly higher real-world emissions than laboratory figures—they want flexibility in how manufacturers achieve zero-emission goals.

The European Commission confirmed it will begin the mandated review of CO2 regulations before the end of 2025, but insists the 2035 zero-emission target remains unchanged. France’s position contrasts sharply with Germany and Italy, whose governments have urged the Commission to reconsider the regulation entirely.

EVXL’s Take

France’s predicament perfectly illustrates the European auto industry’s fundamental problem: they want the environmental credibility of aggressive climate targets without accepting the competitive consequences. The truth is, European automakers spent decades maximizing diesel profits while Chinese companies built EV expertise and battery supply chains. Now they’re demanding regulatory rescue.

As we’ve covered extensively at EVXL, from Stellantis threatening factory closures to Italy’s challenges with the 2035 ban, European manufacturers are paying the price for slow adaptation. Chinese competitors didn’t need “flexibility”—they invested in the right technology at the right time.

The 350,000 jobs at risk in France are real, and workers shouldn’t pay for management failures. But the solution isn’t weakening climate targets—it’s honest industrial policy that either supports a real transition or admits Europe missed the EV boat. Stellantis investing $13 billion in America while begging Brussels for regulatory breaks tells you everything about where they see their future.

France can’t have it both ways: championing green leadership while protecting an industry structure that’s fundamentally uncompetitive. The flexibility they’re requesting might buy time, but it won’t fix the core problem—European automakers need to build EVs people actually want to buy, at prices that compete with China. Regulatory tweaks won’t accomplish that.

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Photo credit: Fiat / Stellantis