PARIS -- The French government is revamping its system of electric vehicle incentives to take into account the amount of energy used in the manufacturing and production process -- a measurement that could exclude many EVs made in China.
France has some of Europe’s most generous EV incentives, with buyers of new cars receiving 5,000 to 7,000 euros, depending on income, in addition to a trade-in bonus. The incentives and trade-in bonus can cut the price of a new EV by 10,000 euros or more.
But critics say that too much of the incentive money -- a total of more than 1 billion euros per year in France -- is going toward the purchase of EVs made in China, where labor costs are lower and the government offers much more support for EV production.
The European Commission has begun investigating whether to set punitive tariffs to protect its producers from imports of cheaper Chinese EVs that it says benefit from state subsidies.
French President Emmanuel Macron and government ministers have made little secret that they want to make sure French state cash is not benefiting Chinese automakers.
A French finance ministry source recently told Reuters that one-third of incentives to consumers buying EVs are going toward vehicles made in China, including cars from SAIC’s MG, the Dacia Spring from Renault Group and the Tesla Model 3.
European automakers, however, have yet to produce inexpensive EVs, although Citroen, Volkswagen Group and Renault have said they are aiming to sell electric vehicles at 25,000 euros or less. The Dacia Spring is currently the least expensive EV on the market in Europe, at about 16,000 euros including incentives in some countries.