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France’s new EV cash incentive rules toughen market for Chinese-made cars

France's new EV cash incentive rules toughen market for Chinese-made cars
PARIS, Dec 14 (Reuters) – France’s revamped rules on consumer cash incentives for electric car purchases favour vehicles made in France and Europe over models manufactured in China, a government list of eligible car types published on Thursday showed.
Some 65% of electric cars sold in France will be eligible for the scheme, which from Friday will include new criteria covering the amount of carbon emitted in the manufacturing of an electric vehicle (EV).
The list of eligible models includes 24 produced by Franco-Italian group Stellantis (STLAM.MI), opens new tab and five by French carmaker Renault (RENA.PA), opens new tab. Elon Musk’s Tesla (TSLA.O), opens new tab Model Y will be eligible but not its Model 3.
Electric vehicle brand MG Motors, owned by China’s SAIC, said it expects the new rules to weigh on the French EV market.
«There are cars that will entirely lose their competitiveness», an MG spokesperson told Reuters, adding that the brand had decided not to apply for the bonus scheme for its MG4 model because it was «designed to exclude us».
French Finance Minister Bruno Le Maire hailed what he called the new rules’ incentive for automakers to reduce their carbon footprint.
«We will no longer be subsidising car production that emits too much CO2,» he said in a statement.
President Emmanuel Macron’s government has wanted to make French and European-made EVs more affordable for domestic consumers relative to cheaper vehicles produced in China.
The average retail price of an EV in Europe was more than 65,000 euros ($71,000) in the first half of 2023, compared with just over 31,000 euros in China, according to research by Jato Dynamics.
The French government already offered buyers a cash incentive of between 5,000 and 7,000 euros to get more electric cars on the road, at a total cost of 1 billion euros ($1.1 billion) per year.
However, in the absence of cheap European-made EVs, a third of all incentives are going to consumers buying EVs made in China, French finance ministry officials say. The trend has helped spur a surge in imports and a growing competitive gap with domestic producers.
China’s auto industry relies heavily on coal-generated electricity, meaning many Chinese-made EVs will henceforth not qualify.
The Ademe agency overseeing the process studied the eligibility of almost 500 EV models and their variants to include in the scheme.
Dacia, the low-cost Renault brand, saw its Spring model imported from China excluded from the list.
Tesla’s Model 3 is made in China. The Model Y, which is larger and more expensive, is made mainly in Berlin and was the top selling EV in France over the first 11 months of the year.

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Reporting by Gilles Guillaume and Elizabeth Pineau; Writing by Silvia Aloisi and Richard Lough; Editing by Jason Neely, Keith Weir, Mark Potter and Nick Macfie

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