New French subsidy rules finalized, Chinese-made EVs excluded

On December 14, local time, France announced a list of electric car models that can receive up to 7,000 euros in government subsidies. from December 15, France will provide tax rebates for electric cars priced below 47,000 euros based on household income.

According to the list, about 65% of the electric cars sold in France will be eligible for subsidies. The subsidy-eligible electric cars include Tesla's Model Y, which is produced in Germany, luxury electric cars from Mercedes-Benz and BMW, 24 models from Stellantis and five models from Renault.

But three of France's best-selling electric cars - the Dacia Spring, the Tesla Model 3 and the MG4 - are excluded, all of which are built in China and then exported to France. Other popular models such as the BYD Atto 3 and BYD Dolphin are also not subsidized.

The Dacia Spring is Europe's cheapest all-electric car, and the loss of subsidies will see its price rise from €15,800 to €20,800. With a cumulative total of 26,951 new cars sold in France in the first 11 months of the year, the Dacia Spring is the second best-selling electric car in France after the Tesla Model Y. The Dacia Spring is also the second best-selling electric car in France. The Tesla Model 3 and MG4 are in third and fourth place, with 19,749 and 15,934 units sold respectively.

A spokesman for SAIC's MG Motor said it expects the new regulations to have an impact on the French EV market, Reuters reports. "Some models will be completely uncompetitive," he said, adding that MG has decided not to apply for subsidies for its MG4 model because the program "aims to exclude us".

This subsidy policy has been in the works since September of this year, and the adjusted subsidy policy incorporates carbon emissions from the car manufacturing process into the review. French Finance Minister Bruno Le Maire said, "We will no longer subsidize electric cars that emit too much carbon dioxide and encourage carmakers to decarbonize their production and transportation processes in order to receive subsidies." The logistical carbon emissions added by Chinese-made electric cars in shipping them to Europe, as well as the use of fossil fuels in the manufacturing process, make this regulation a disguised exclusion of Chinese-made electric cars.

According to consulting firm Ptolemus Consulting Group, the price of an electric car in China was "cut in half" between 2015 and 2022, from €67,000 to €32,000. However, the price of electric cars in Europe has risen by 17%, from just under 49,000 euros to more than 55,000 euros, making them unaffordable for many ordinary Europeans.

So far this year, the price gap between China and Europe has continued to widen. In the first half of this year, the average retail price of an electric car in Europe was more than €65,000, while the average retail price of an electric car in China was just over €31,000, according to Jato Dynamics.

The French government has always wanted consumers to buy French- and European-made EVs as a way to promote localized production, as opposed to cheaper EVs made in China. So in addition to a tax rebate of up to 7,000 euros, a government-funded leasing program that offers low-income families 150 euros a month to rent a car is also being offered.

Some of the cars in the leasing program

Similar to the U.S. Inflation Reduction Act, France is looking to take advantage of the subsidy program to bring electric vehicle production lines back to France and the European Union. Under the administration, some automakers may consider producing in Europe, after SAIC and BYD both revealed plans to do so.

"We will produce more and more cars in France," French President Emmanuel Macron said in a video posted on social media on Dec. 14, "with a focus on helping you to choose electric cars produced locally." France previously planned to produce more than 1 million electric cars by the end of 2027.

The new regulations can also be seen as a microcosm of Europe's current attitude toward Chinese-made electric cars, which are being investigated by the European Union for countervailing subsidies at a time when France is excluding Chinese-made electric cars from its subsidies.

For more information about MG accessories or community events, please contact us at support@mgtitan.com.