France plans EV subsidy reform to support Europe-made cars

Peng Chen, DIGITIMES Asia, Taipei 0

French President Macron announces Taiwan-based ProLogium's investment in France. Credit: AFP

French President Emmanuel Macron announced last week that the country will revise its EV subsidy program, aiming to facilitate battery and vehicle production in Europe. According to media reports, the adjustment could significantly impact cars made in China and the US.

Electrive reported that France currently offers a subsidy of EUR5,000 (US$5,450) for battery EV purchases that cost less than EUR47,000, no matter where the car was produced. In the first quarter of 2023, about 40% of the incentives were for China-made EVs.

An updated subsidy program will be finalized by the end of this year. According to Macron, emissions created during production will affect an EV's eligibility for the incentives. Several news outlets reported that cars made in China probably will not meet the standards as the country heavily relies on coal as an energy source.

The French government said the revised subsidy aims to strengthen battery and EV production in Europe. Macron said it does not mean France is protectionist and will close the market.

However, the French president said the government does not want to use taxpayers' money to speed up industrialization that is not in Europe, according to Electrive. He also asked the European Union to follow suit.

Macron said he does not want Europe to support non-local-made batteries because "neither the Americans nor the Chinese are helping batteries made in Europe."

France has been working on gaining a presence in automotive electrification. On May 15, Macron met with Tesla CEO Elon Musk in the country. According to Reuters, Musk said after the meeting that he was very impressed with how welcoming the president and the French government is to industry.

He was confident that Tesla will invest in France significantly in the future, Musk added. But he could not provide a timetable.

Recently, France welcomed another battery investment in the country. On May 12, Taiwan-based battery technology provider ProLogium announced a EUR5.2 billion cell project in Dunkirk, France.

According to ProLogium, mass production is slated to begin in 2027 with an initial production capacity of 8GWh.

Bloomberg reported that Gilles Normand, ProLogium's executive vice president for international development, said the company is eager to have material procurement, R&D centers and mass production capacity in Europe.