France will offer subsidies only for EVs made in the EU

France wants to offer financial support for the purchase of electric vehicles. However, an EV’s production must meet a strict carbon footprint limit, effectively ruling out subsidies for imported cars.

In September last year, France introduced new rules for financial incentives in the electric vehicle sector. Since January this year, the government has offered incentives of 5000 to 7000 EUR for EV manufacturers, as reported by Energypost. To qualify for support, an EV’s total carbon footprint must be below 14,75 tonnes of CO2. The rules also provide for larger financial incentives for EVs with a lower carbon footprint.

The subsidy scheme aims to use this environmental measure to support domestic and European production over production in countries outside Europe. China, for example, is one of the world’s largest manufacturers. The measure is therefore seen as a strategic step to support the European automotive industry and a response to the global shift to electric vehicles and the potential threat to European car and battery manufacturers.

The rules are not clear-cut

However, the French subsidy rules have some shortcomings. For example, they lack clear definitions of the assumptions and parameters used to measure emissions. It is therefore not entirely clear which emissions are included in the calculation of the total carbon footprint. Some also criticise the discrimination against cheaper competitors, such as those from China, and argue that similar measures will not ultimately make electric mobility more affordable. Others support the measure and are urging other European countries to adopt it. For example, the sectoral NGO Transport&Environment recommends that other EU countries adopt the measure too, but says they should all follow a harmonised European methodology.

According to T&E, consistency and effectiveness must be maintained in this type of measure: public funds allocated to EV subsidies should therefore be subject to strict conditions. Car manufacturers should first support the gradual phase-out of internal combustion engines by 2035 in order to qualify for these incentives.

The French government published a list of vehicles eligible for support in December. According to an analysis by Energypost, the measure will put six popular EV models made in China at a disadvantage: the Dacia Spring, Tesla Model 3 and four SAIC MG models. Together, these vehicles account for 26 % of EV sales.