France has announced a new cash incentive program for electric vehicles (EVs) set to begin in January 2024. The updated program, called the “green bonus,” aims to support the French and European carmaking industries in their competition with Chinese rivals. Under the new rules, the incentive will no longer be a flat €5,000 for all EVs, but will take into account the car’s entire life cycle and components, including the electric battery. The goal is to promote the production of EVs in France and the EU.
The green bonus will be based on a “green score” assigned to each EV, which will consider factors such as CO2 emissions from the production of steel and aluminum, the usage of critical raw materials in the car’s body and battery, and the assembly and transportation of the vehicle. The bonus can reach up to €5,000 per car, with higher amounts available for poorer households. Approximately €1 billion has been allocated for the program.
This move comes as China has been flooding the EU market with its own EVs, with Chinese brands capturing 8% of the market in 2022. European carmakers have expressed concerns about the increasing competition from Chinese companies, who have been able to offer cheaper EVs due to subsidies and lower production costs. By incentivizing the production of EVs in France and the EU, the government hopes to reduce dependency on Chinese imports and boost local job creation.
In addition to the cash incentives, France has also taken other measures to address the growing dominance of China in the EV sector. The country has widened the scope of foreign investment screening to include the mining sector, to have better control over the extraction and processing of critical raw materials. The European Commission has also launched an anti-subsidy probe against Chinese EVs, signaling a determination to fight for fair competition and reciprocity from China.
Overall, these initiatives aim to promote the growth of the domestic EV industry and ensure a level playing field in the market. Whether they will effectively keep Chinese EVs at bay remains to be seen.
Sources:
– Euractiv (Source article)