Chinese share of French EV market slumps after incentives curbed

FILE PHOTO: The rear light of a Dacia Spring electric car is pictured during the Brand Manifesto Dacia event at Le Bourget near Paris, France, September 13, 2022. REUTERS/Gilles Guillaume/File Photo

PARIS (Reuters) – Sales of the three most popular Chinese-made electric vehicles in France have collapsed since the government made them ineligible for cash purchased incentives, industry data analysed by Reuters shows.

A surge in imports of Chinese electric cars into Europe has triggered EU tariff threats, which are expected to be a bone of contention when President Emmanuel Macron hosts his Chinese counterpart for a state visit on Monday.

France, however, did not wait for a European Union decision on implementing tariffs, instead redesigning its cash bonus scheme in December to exclude the purchase of models made in China, which have rapidly gained market share.

In the months ahead of the move, the three most popular Chinese-made cars sold in France – the Dacia Spring (Renault), Tesla’s Model 3 and SAIC’s MG4 – accounted for 22% of the market, according to Reuters calculations using data from the companies and industry body AAA Data.

Their share then surged to 32% in December ahead of the new eligibility rules that require vehicles to meet criteria covering how much carbon is emitted during the manufacturing process and transport to market, favouring vehicles made in Europe.

The three models’ share of the market has since steadily declined to just 4% in April, a drop hailed by Finance Minister Bruno Le Maire as a sign the more restrictive eligibility rules are working.

The French government has been eager to give domestic carmakers time to come out with their own EV models and catch up with Chinese makers that moved early to build up huge production capacity.

(Reporting by Gilles Guillaume, writing by Leigh Thomas; Editing by Kirsten Donovan)