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French EV subsidy change designed to punish Chinese EVs will snag Tesla, Dacia and others

New rules take aim at Chinese brands but will also affect European marques imported from China

Just days after European Commission president Ursula von der Leyen’s speech about Chinese electric carmakers’ predatory pricing practices, France is running with her words.

Paris has redefined the criteria for the country’s electric vehicle incentives – cash of up to €5,000 – under new rules which will stop subsidies for electric vehicles which have a poor carbon footprint. It effectively eliminates all vehicles exported from China, which relies on coal for the bulk of its electricity generation.

The so-called “green bonus” for EVs costing less than €47,000 hits up French taxpayers for more than €1 billion per annum and officials maintain that it’s allowable under WTO rules.

The new rules take aim not just at Chinese brands like BYD, Geely, XPeng, MG and Wuling but will also affect European marques like BMW and Dacia (the latter owned by France’s top carmaker Renault), which are imported from China. Versions of Tesla’s Model Y and 3 which are manufactured in the Texas-based company’s Shanghai factory likely also fall foul of the new regime.

The Model Y is the country’s top selling battery electric vehicle (BEV), capturing 12% of the market in 2023, with the Model 3 in second place. Pricing for the Model Y starts below the €47,000 threshold. Chinese automaker Geely’s MG4 is the sixth-bestselling BEV model in France while the Dacia Spring Electric also makes the top 10.

Overall, data from the Adamas Intelligence EV Battery Capacity and Battery Metals Tracker shows that in the first half of 2023, 19% of all GWhs delivered to EV (including hybrid) buyers in Europe, including Britain and non-EU states, were contained in China-made EVs and packs. Ironically, the bulk of European EV imports from China this year-to-date were non-Chinese brands.

In absolute terms, the battery power exported to Europe from China grew more than 51% during the first half of the year – a total of 14 GWhs.

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