France to Stop Subsidizing Chinese EVs

The French government’s “bonus écologique,” which subsidizes electric vehicles, blatantly benefits European-made vehicles, which is clear from the recently released list of qualified vehicles.

Approximately 65% of all EVs sold in France meet the eligibility requirements. Numerous models from the Stellantis Group, Renault, and German automakers are on the list of automobiles. The Tesla Model Y, which is mostly produced in Grünheide, is still qualified for the subsidy. But the Chinese-built Tesla Model 3, the Dacia Spring (produced in China), and the MG4 are no longer qualified. Moreover, BYD’s electric vehicles available in France are not included in the list. In general, there isn’t a single model from a Chinese brand included.

Related: Stellantis CEO Calls for Increased Tariffs on Chinese Cars

On January 1, 2024, the new environmental incentive will take effect. The French government’s support for electric cars will henceforth be reliant on CO2 emissions from vehicle and battery production, as stated by President Emmanuel Macron in May. It will be based on a point system starting at the beginning of the year that takes into account several environmental factors, such as the assembly plant’s environmental footprint and the routes taken by transportation to the point of sale. Manufacturers in China are unable to achieve the requirements because coal accounts for over 60% of the country’s electrical production.

BYD Atto3
Chinese cars were the center of attraction at this year’s Paris Motor Show

At a total cost of 1 billion euros ($1.07 billion) annually, the French government currently provides buyers with a cash incentive of between 5,000 and 7,000 euros for qualified models to encourage the use of electric vehicles. However, in the absence of cheap European-made EVs, a third of all incentives are going to consumers buying EVs made in China, a French finance ministry source said. The trend has helped spur a surge in imports and a growing competitive gap with domestic producers.

Related: Two Chinese Cars Among Finalists For the 2024 European Car of the Year Title

Given that Chinese automobiles are thought to be 20% less expensive than their counterparts built in Europe, the benefit might matter for cars costing less than 25,000 euros. However, French auto consumers will have to wait since the e-C3 city car from Stellantis, built in Slovakia, and the R5 city car from Renault, made in France, are not expected to be available until 2024. Interestingly, according to analysts, even without the financial incentive, a large number of EVs produced in China will still be competitive.

MG 4 Supertest recharge 03

For example, with a starting price of 30,000 euros, SAIC group’s MG4 will be less expensive than Renault’s equivalent Megane compact car, which starts at 38,000 euros – or 33,000 euros with a 5,000 euro incentive. However, S&P Global Mobility analyst Lorraine Morard said that even if most Chinese cars are ineligible for the bonus they would probably get 7-8% of France’s electric car market next year, instead of 10% otherwise.

Notify of
Inline Feedbacks
View all comments