France Proposes EU-Wide Subsidies for Electric Cars, Seeks Adjustments to CO2 Targets

Credit: Renault

French Industry Minister Marc Ferracci is advocating for a comprehensive aid package to bolster Europe’s car industry, calling for coordinated EU-wide purchase premiums for electric vehicles (EVs) and revisions to emissions targets for manufacturers.

Ferracci, speaking to Germany’s Handelsblatt, emphasized a subsidy model similar to France’s existing program, which adjusts support based on a vehicle’s CO2 emissions in production, a model that excludes EVs from China.

Ferracci proposed extending the subsidies across the EU, focusing especially on the electrification of commercial fleets. “The principle is that we – just like our trade competitors do – favour European cars when it comes to subsidies, be it for the purchase premium or for investments,” he stated.

The minister also acknowledged competitive pressure from China, saying, “China-made electric cars are both cheaper and more innovative,” which poses significant challenges for European manufacturers. He advocated additional EU tariffs on Chinese EV imports, a position aligned with recent EU Commission findings on Chinese state subsidies for their EV supply chain.

While Ferracci remains committed to the EU’s 2035 ban on new combustion vehicle registrations, he has urged the EU Commission to delay penalties tied to upcoming fleet-wide CO2 reduction targets set to take effect in January 2025.

He cited dwindling EV demand across EU member states as a key factor, adding that increased demand through public orders and corporate fleets will be critical to support the transition. “We will try to use all the levers at our disposal,” Ferracci concluded.

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