Officials have denied problems in the Franco-German relationship, but Chancellor Scholz’s focus on domestic politics is upsetting some lawmakers in Europe.
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Fresh tensions between France and Germany are challenging their relationship at a time when their unity is critical for broader European policy in tackling the energy crisis.
The leaders of the two nations will meet in Paris on Wednesday, but this encounter almost got canceled.
It was initially meant to be a broader discussion including government ministers, then it was announced it was being postponed, and eventually, it was transformed into just a meeting between the two heads of state.
“The Franco-German’s historical commitment to close cooperation seems questioned, or at least challenged, today,” Alberto Alemanno, professor of EU law at H.E.C Business School, told CNBC via email.
He added that the action of German Chancellor Olaf Scholz is “creating the deepest divides within the Union.”
France and Germany are the two largest economies in the European Union and two of the founding nations of this political grouping. Their unity is essential for EU policymaking.
France and Germany have had their differences over how to tackle the energy crisis. While, for example, France defended a cap on European gas prices, the German government only agreed to do so last week — and with several conditions attached.
Germany has also been criticized for approving a 200 billion euro ($200.2 billion) rescue package looking to support German companies and families while blocking steps at the EU level to raise more money and support European nations with less fiscal room.
French Finance Minister Bruno Le Maire said in the wake of this plan that the euro zone needed to work together and avoid fragmentation among the 19 countries that share the common currency.
In addition, there are concerns in the broader EU about Scholz’s upcoming trip to China and for looking to do business with a nation that is increasingly deemed as a rival to European countries. There are also issues with Germany’s long delay in delivering weapons to Ukraine.
“The relationship is obviously strained, a development I blame mostly the German government for,” Jacob Kirkegaard, senior fellow at the German Marshall Fund think tank, said via email.
“Scholz leads the first three-party coalition in German history, and as such has less control over his ‘domestic politics’ than previous German chancellors on top of having ideologically often opposed coalition members in the Greens and FDP,” he added.
‘Blown out of proportion’
French officials, however, have denied any sort of tensions, but they have acknowledged that Germany’s three-party coalition makes any sort of agreement slower to achieve.
“This has been blown out of proportion,” a French official, who did not want to be named due to the sensitivity of this issue, told CNBC about the tension between Paris and Berlin.
The changes to the original gathering have been linked to calendar issues, with German ministers reportedly arguing this was a good week for holidays with their families. Le Maire said the postponement had “nothing to do with any kind of political difficulties,” according to Politico.
The same official added that sometimes both countries move “more slowly” on policy than what would be desired, but “we are always discussing with the Germans.”
Nonetheless, they added that the German coalition, in place since December, is relatively new and “there is a learning curve there.”
“It takes a lot of time for them to find a common position,” the official said.
The German government was not immediately available for comment when contacted by CNBC.
Scholz said last week that “as far as cooperation with France is concerned, President Macron and I meet very, very often.”
Analysts at political risk consultancy Eurasia Group have also noted that “frustration with Berlin has grown” across Europe.
“While the criticism initially centered around what was perceived by many senior EU officials as Berlin’s limited military support for [Kyiv], member states across the board have now started to criticize Germany’s fiscal and energy policies too,” they said in a note Tuesday.
“Disappointment with Berlin has now gone so far that it actually risks weakening the Franco-German alliance—the EU’s single most important bilateral relationship,” they added.
Flying cars are no longer just for the movies. Alef Aeronautics has begun building the first electric flying cars for customers, which are being hand-made in California.
Electric flying cars are real and hand-made in the US
It sounds like something from The Jetsons or Harry Potter, but flying cars are becoming a reality. Alef has been developing all-electric flying cars for about a decade now.
After unveiling a prototype in 2016, the company secured backing from early Tesla and Bitcoin investor Tim Draper. Draper became a pioneering investor and mentor to the team.
The big funding round propelled Alef to create not just a toy, but a flying car that can be used as an everyday commute vehicle.
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In 2018, the company’s first full-size “skeleton” was flown, and the following year, the first prototype was shown to a group of investors.
Alef introduced its first model, dubbed the Model A, in 2022, a 100% electric flying car that can drive 220 miles with a 110-mile flight range.
CEO Jim Dukhovny introduces the Model A electric flying car at the Detroit Auto Show (Source: Alef)
Less than a year later, it became the first to receive a Special Airworthiness Certification from the US Federal Aviation Administration while securing its first pre-orders from a car dealership.
We got our first look at the flying car in action earlier this year after Alef released a video of an ultralight Model A jumping over other vehicles, including a Tesla Cybertruck (see the video below). According to Alef, it was the “first-ever video in history of a car driving and vertically taking off.”
Alef’s electric flying car jumps over a Tesla Cybertruck (Source: Alef Aeronautics)
In its mission to make flying cars a reality, the California-based startup announced another major milestone on Monday.
Alef said it has begun manufacturing the first flying cars for customers at its facility in Silicon Valley, California. The first models are being hand-made and will be delivered to just a few early customers “for the purpose of testing flying cars in the real world environment,” according to Alef.
The company plans to train and support early adopters, using lessons learned as it ramps up production and deliveries.
Alef Aeronautics team members manufacturing a section of the Alef flying car’s wing (Source: Alef Aeronautics)
“We are happy to report that production of the first flying car has started on schedule,” Alef’s CEO, Jim Dukhovny, said at the event.
Alef claims its flying cars are “100% electric, drivable on public roads, and has vertical takeoff and landing capabilities.”
The startup has already received 3,500 pre-orders, which it says is worth $1 billion. Alef’s flying car is expected to start at around $299,999. You can pre-order one on Alef’s website with a $150 deposit, or you can secure a spot in the priority queue for $1,500. The first customer deliveries are expected to begin in 2026.
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Every weekday, the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Tuesday’s key moments. 1. Stocks are higher ahead of Wednesday’s Federal Reserve interest rate decision. The U.S. central bank is expected to cut rates by 25 basis points, making it the third cut of 2025 and a catalyst for the market. “If the Fed cuts, that’s just gigantic for some of our stocks,” Jim Cramer said, mentioning rate-sensitive Club name Home Depot and technology stocks. Meanwhile, our “own it, don’t trade it” name, Nvidia , is in the headlines again after President Donald Trump confirmed he will allow the company to sell its more advanced H200 chips to approved customers in China, provided the U.S. gets a 25% cut. Wells Fargo estimates it could add $25 billion to $30 billion in annual revenue and $0.60 to $0.70 in earnings per share. We’re not banking on China, but it’s a bonus if Nvidia gets the sales. 2. Shares of chemical company Linde climbed 1% Tuesday following news that CEO Sanjiv Lamba bought 2,520 shares of Linde at roughly $396 per share, roughly $1 million worth, according to a recent SEC filing. The stock hit a new 52-week low on Monday of $387.78 and has dropped about 18% since the start of October. The last time Lamba bought shares was in March 2022 at $268.62 per share, also $1 million worth at the time. Despite the very disappointing performance over the past few months, this insider buying could be “a sign that the stock price action might be wrong and the business is actually holding up better than the market thinks,” said portfolio director Jeff Marks. 3. “I am concerned now about Costco,” Jim said, comparing it to Walmart , which has been a stronger-performing retailer this year. Walmart stock is up 26% year to date, while Costco shares are down more than 30% over the same period. Jim said he regards Costco as “one of the greatest performing stocks of all time” and doesn’t want to sell it. But he added that if it keeps going down, he will have to reevaluate. We would like to see a signal from management that proves this decline isn’t a new normal when Costco reports its first quarter of fiscal 2026 on Thursday after the bell. 4. Stocks covered in Tuesday’s rapid fire at the end of the video were: CVS , Toll Brothers , Marvell Tech , Campbell’s , and PepsiCo . (Jim Cramer’s Charitable Trust is long HD, NVDA, LIN, COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Ford is promising that more affordable EVs are coming soon. A new partnership will include two Ford-branded electric vehicles, but that’s just the start.
Ford and Renault partner up on affordable EVs
“We know we’re in a fight for our lives,” Ford’s CEO Jim Farley warned on Monday (via CNN) before announcing a landmark partnership with Renault to develop more affordable EVs and fend off surging Chinese brands like BYD and SAIC’s MG.
Ford said the new partnership is “a first step,” as part of a broader restructuring in the region. The plans include two new Ford-branded EVs, based on Renault’s Ampere platform.
Although they will share underpinnings with the popular Renault 5, the American automaker will lead the design to “ensure these vehicles are distinctly Ford.”
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The first is expected to be an electric successor to the widely popular Fiesta, while the second is rumoured to be a small EV crossover, similar to the Renault 4.
The electric Ford Puma Gen-E (Source: Ford)
Ford didn’t offer specifics, but said the first vehicles will begin arriving in showrooms in 2028. Farley told reporters that the new EVs will be smaller than anything planned for the US, as it seeks to fill a critical gap in its European lineup.
“As an American company, we see Europe as the frontline in the global transformation of our industry,” Farley said, adding that “how we compete here will write the playbook for the next generation.”
Ford’s electric vehicles in Europe from left to right: Puma Gen-E, Explorer, Capri, and Mustang Mach-E (Source: Ford)
The partnership will also include jointly developing Ford and Renault-branded commercial vehicles using common platforms.
Ford’s current EV lineup in Europe consists of the Electric Explorer and Capri, which share a platform with the Volkswagen ID.4 and ID.5, and the Puma Gen E.
Ford Explorer EV production in Cologne (Source: Ford)
The news comes just a day after Farley warned that the EU’s emissions rules are “risking the future” of the auto industry.
Electrek’s Take
Ford initially backed the EU’s push to have all-electric vehicle sales in the region by 2035, but now it’s blaming slower-than-expected EV demand and calling for looser rules.
Farley has warned several times now that Chinese automakers, like BYD, are an “existential threat” to the auto industry. As part of its restructuring, Ford has already announced plans to cut thousands of jobs in Europe while reducing output at its Cologne EV facility.
Ford’s share of European passenger car sales has plummeted from 6.1% in 2019 to just 3.3% through October of this year.
Although the company is blaming slower EV demand, electric vehicles are still gaining ground in Europe. Through October 2025, nearly 1.5 million EVs were registered in Europe, accounting for 16.4% of the market. That’s up from around 13.2% through the first 10 months of 2024.
Meanwhile, the combined share of petrol and diesel cars fell to 36.6% from 46.3% over the same period.
Are EV sales slowing? Or, is it a Ford problem? The new alliance with Renault to build more affordable EVs will be critical to Ford’s comeback in the region.
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