France Reduces Financial Support for Electric Cars Made in Asia

author: FutureCar Staff    

France has implemented new subsidy criteria for electric vehicles, aiming to exclude cars made outside the EU starting from January 1st next year. This move is indirectly targeting Chinese carmakers, who have been rapidly increasing their market share in France with their affordable models. However, the measure affects all Asian manufacturers, including Korean EV makers.

The French Ministry of Economics and Finance announced on Wednesday that the new criteria will consider the carbon emissions generated during the production and transportation of electric cars based on their country of origin. This means that buyers of electric vehicles in France will no longer be eligible for a cash incentive of up to 5,000 euros when purchasing Korean EVs.

The carbon emissions associated with Korean-made car chassis are significantly higher compared to those from North America, Europe, and Japan. Korean car chassis produce 18.5 kg of carbon emissions per 1 kg of aluminum, while North American cars emit 8.5 kg, European cars emit 8.6 kg, and Japanese cars emit 12.6 kg.

In addition, the carbon emissions for key components of electric cars, such as batteries, are also higher for Korea compared to Europe, Japan, and China. Korea produces 63 kg of carbon emissions per kilowatt-hour, similar to Japan's 67 kg and China's 68 kg, while Europe produces 53 kg.

Furthermore, the carbon emissions associated with transporting finished cars to their destination are more disadvantageous for distant Asian countries. For example, in rail transport, Asian countries are assessed at 0.041 kg per ton per km, whereas France is rated 0.01 kg and other European countries 0.023 kg.

French authorities have stated that most electric cars produced in Asia, including those from China, are likely to be excluded from France's electric vehicle purchase subsidy scheme starting next year. This has raised concerns among Korean carmakers, such as Hyundai, who sold 16,655 electric cars in France last year. Only 40 percent of these cars were produced in Europe, and Hyundai plans to increase the proportion of electric-car production in their European factories to comply with the new subsidy criteria.

The Ministry of Trade, Industry, and Energy in Korea has expressed its intention to continue negotiations with the French government to minimize the burden on Korean companies. The Korea International Trade Association has also voiced concerns, warning that France's new subsidy scheme might violate free trade agreements between the two countries that prohibit discriminatory treatment.

FutureCar Staff