The MG4 compact sedan, from Chinese company SAIC, has a starting price of less than 30,000 euros in France before incentives, while its Renault rival, the Mégane E-Tech, has a starting price of 38,000 euros.
PARIS – The French government is revamping its formula of incentives for electric vehicles to take into account the amount of energy used in production and the production process, a move that could exclude many electric cars made in China.
France has the most generous electric vehicle incentives in Europe, and new car buyers receive between 5,000 and 7,000 euros, depending on their income, plus a trade-in bonus. Incentives and trade-in bonuses can increase the value of a new electric vehicle. Vehicle up to € 10,000 or more.
But critics say much of the incentive money — a total of more than a billion euros a year in France — goes toward buying electric cars made in China, where the costs of hard work are lower and the government gives much more for electric cars. . Production of electric cars.
The European Commission has begun considering imposing punitive price lists to protect its manufacturers from imports of less expensive Chinese electric vehicles, which it says take advantage of state subsidies.
French President Emmanuel Macron and government ministers have made no secret of their preference for French state money not to gain advantages for Chinese automakers.
A French finance ministry recently told Reuters that a third of incentives for consumers buying electric cars were for Chinese-made cars, adding SAIC’s MG cars, Renault’s Dacia Spring and Tesla Model 3.
However, European carmakers have yet to produce affordable electric vehicles, although Citroen, the Volkswagen Group and Renault have said they aim to sell electric vehicles at 25,000 euros or less. The Dacia Spring is currently the most affordable electric vehicle on the market in Europe. , about 16,000 euros, incentives included in some countries.
This trend has helped spur an increase in imports from China and a growing competitive gap with domestic producers.
From Dec. 15, France will take carbon emissions into account during the production process of a model, the Ministry of Energy Transition announced on Wednesday.
“Until now, incentives were conditional solely on the weight, value and use of greenhouse gases emitted,” the ministry said in a statement. “This technique does not praise the most virtuous vehicles, as it does not take into account emissions similar to those of the entire life cycle, from manufacturing to road use. “
The Dacia Spring is the top electric vehicle in Europe, with a value before incentives of about 21,000 euros in France. It is manufactured in China.
Under the new rules, car models will be evaluated against thresholds set by the government in relation to the amount of energy used to manufacture their materials, when assembling and transporting them to market, as well as the type of vehicle battery.
Since Chinese industry relies heavily on coal-fired electricity, the criteria threaten to make the bonus a hit for many Chinese automakers.
The government, which will publish the names of models that meet the new criteria in December, says the criteria are in line with World Trade Organization regulations because exemptions are allowed for environmental and fitness reasons.
The Tesla Model 3 is manufactured in China and exported to Europe. After recent price drops, it is eligible to receive incentives for electric vehicles in France.
Since Chinese cars are estimated to be 20% cheaper than those made in Europe, the bonus can make all the difference for cars priced below €25,000.
But French car buyers will have to wait because the Stellantis e-C3 city car, made in Slovakia, and Renault’s R5, made in France, are expected to hit the market until 2024.
However, many Chinese-made electric cars will remain competitive even with monetary incentives.
With an initial value of around €30,000, SAIC’s MG4 will be less expensive than Renault’s equivalent Mégane electric compact car, which starts at €38,000, or €33,000 at a premium of €5,000.
Tesla’s Model 3, one of the best-selling electric cars in France, could also be affected by new regulations for Chinese-made cars. The Model Y, the best-selling car in Europe, is manufactured in Germany, some sets arrive. in Europe from Tesla’s Shanghai factory.
Lorraine Morard, Analyst, S
The BYD Dolphins have an initial value of less than 30,000 euros. BYD said it was contemplating production sites in Europe.
Renault CEO Luca de Meo recently ruled out moving Spring production from China to Europe and said it could live without the bonus.
Styling is lately one of the best-selling cars in France along with the Model Y, the Peugeot e-208, the New Fiat 500, the Mégane E-Tech and the MG4.
MG’s Chinese parent SAIC says it is looking for a production site in Europe, as is Chinese rival BYD, whose Dolphin styling would compete in the same segment as the MG4 and Mégane with a starting price of less than €30,000.
Peter Sigal and Reuters contributed to this report.
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