Dacia Spring budget EV could lose French incentives

Dacia Spring budget EV could lose French incentives

Automotive News Europe — 2023-10-24

Automotive Industry

Renault Group is expecting to lose French EV incentives for the China-built Dacia Spring full-electric minicar, as the government of President Emmanuel Macron revises the bonus system, executives said.

The Spring, built in China by Renault Group’s partner, JMEV, has been a success for Dacia, with about 42,000 sales this year. It is the least-expensive EV in Europe, with a base price of about  €21,000 in France, but that drops to less than  €16,000 with incentives.

Half of all Spring sales are in France, which has some of Europe's most generous EV incentives. Buyers of electric vehicles  €47,000 or less receive  €5,000, plus there are income-linked scrappage incentives

The EU has opened an investigation into the Chinese government’s support for EV manufacturing amid fears that the European market could be “flooded” with lower-cost cars from China.

The French government has taken more immediate action, announcing that it would take into account a car’s total carbon footprint -- a move aimed at China, where much of its energy comes from coal-fired plants.

The largest portion of a plant's emissions -- about 80%, supplier sources told Automotive News Europe -- result from the energy source used to power the facility.

The final list of EVs eligible for French subsidies will be released Dec. 15, but Renault Group CFO Thierry Pieton and Dacia brand chief Denis Le Vot said last week that they expect the Spring will lose its eligibility.

New version due in 2024

Pieton said Dacia is working on a new version of the Spring “with an improved cost position” that will be launched at the end of the first quarter. 

The Spring is derived from the Renault Kwid minicar that was first launched in India in 2019. It was first sold in China as a full-electric vehicle, and then homologated for Europe in 2021. 

It ranks seventh overall in the minicar segment with 41,618 sales through September, according to preliminary figures from Dataforce. It is the No. 2-selling EV in the segment after the Fiat New 500, which ranks fifth overall with 46,305 sales. The Spring was the No. 15-selling car in France in that period, with 21,103 sales, according to the trade group PFA.

Potential challenge from Citroen

In the short term, Pieton said that Spring sales were benefiting from the potential loss of incentives, which would add about 25% to the cost of the car.

“The team is working hard on the cost side to offset that,” he said.

Le Vot said he expected the new version would give Spring sales a boost, even without the incentives. He added that Spring sales were up 40% this year. It will also be launched in the U.K. and Ireland in right-hand-drive versions in 2024.

While the Spring is currently Europe’s most affordable EV, it could be challenged by a new model from Citroen, the New e-C3, which will start at  €23,300 but is built in Trnava, Slovakia, likely making it eligible for French subsidies. A sub- €20,000 version of the e-C3 is due in 2025.