Automotive News Europe — 2024-05-06
Automotive Industry
The goals come amid Chinese President Xi Jinping's state visit to France.
The French government has drawn up a wide-ranging pact with the automotive industry that sets new targets for electric vehicle sales.
The contract between the government, French business groups and unions aims for a fourfold increase in the sale of battery-electric cars to 800,000 a year in 2027. It also targets a sixfold increase for electric light commercial vehicles, to 100,000 a year.
While there is no explicit amount specified for new subsidies, the pact pledges to continue with support for EV purchases and leases. The contract also has a chapter on "ensuring our sovereignty" that includes stress testing supply chains for critical materials.
The new "strategic sector contract" comes as France and other countries sound the alarm over the risk of over-capacity in China's EV market submerging their own domestic industries.
The European Commission acted on those concerns by launching an investigation into China's support for its EV sector.
"The auto industry is part of our industrial culture and this industry is facing a once-in-a-century change," French Finance Minister Bruno Le Maire said.
"The transition is difficult, with strong competition from other countries, in particular China, so we need solidarity in the sector," he said.
France has taken its own action against Chinese imports by restricting cash support for EV purchases to vehicles with the lowest carbon footprint in production — a move that de facto excludes many Chinese-made models. It has also the first country to use new European rules to support the nascent battery industry with green tax credits.
"Europe must adopt a trade policy that protects our industry, our jobs and our technology," Le Maire said. "I decided to limit bonuses for EVs to cars that respect the strictest environmental norms, quite simply to enhance our production and confront competition that is tougher and tougher, if not ferocious."
The wide-ranging accord also includes a framework for cooperation on innovation, retraining, bolstering the sector’s supply chain in France, and increasing the network of recharging stations.
The pact comes amid Chinese President Xi Jinping's state visit to France on Monday (6 May 2024) and Tuesday (7 May 2024).
The EU-China tensions over EVs was expected to be front and center of Xi's visit to France. The tension has escalated into a broader spat, with Beijing launching a liquor dumping probe that could ultimately hurt French cognac makers in particular.