Industry data indicates that the French government’s efforts to limit the import of Chinese-made electric vehicles are paying off, bringing to light one of the most delicate trade problems when China’s president visits next week.
EU tariff threats have been sparked by an increase in Chinese electric car imports into Europe, and these are likely to be a point of dispute when President Emmanuel Macron receives his Chinese counterpart for a state visit on Monday.
Instead of waiting for the European Union to decide whether to impose tariffs, France changed its cash bonus program in December to stop allowing the purchase of Chinese models, which were quickly gaining market share.
According to Reuters calculations using data from the companies and industry body AAA Data, the three most popular Chinese-made cars sold in France in the months prior to the move were the SAIC MG4 (600104.SS), opens new tab; Tesla’s Model 3 (TSLA.O), opens new tab; and Dacia Spring (Renault (RENA.PA), opens new tab), which together accounted for 22% of the market.
Then, in December, their percentage shot up to 32% ahead of the new eligibility regulations that favor European-made automobiles by requiring them to meet standards for carbon emissions during the manufacture and transportation phases of the vehicle life.
Since then, the market share of the three models has gradually decreased to barely 4% in April, a decrease that Finance Minister Bruno Le Maire welcomed as evidence that the stricter qualifying requirements are having the desired effect.
During an end-of-March visit to a Renault factory, Le Maire remarked, “It’s proof that when we defend our interests and the environment, we get results for our industry, factories, and jobs.”
The French government is keen to allow home automakers enough time to release their own EV models and overtake Chinese manufacturers that raced quickly to amass massive production capacity.
Experts, however, stated that the modifications to the measures would only provide a brief boost to domestic businesses.
The head of the French think tank Observatoire Cetelem, Flavien Neuvy, is an economist. “I do not think that made-in-China [imports] will remain this low because Chinese manufacturers have the means to adapt with competitive prices, despite the absence of bonuses,” Neuvy stated.
