Bruno Le Maire: European auto industry can survive cheap Chinese EVs

According to Finance Minister Bruno Le Maire, France’s new auto subsidies “pave the way” for Europe to be able to resist the threat of a flood of cheaper Chinese electric vehicles imported into Europe.

According to a set of measures announced in May for the support of green industries, France will only provide subsidies for new electric cars based on their producer’s emissions. This will affect manufacturers in China where electricity is largely generated by coal.

Le Maire, who met Chinese leaders in Beijing to discuss trade, investment and other issues this weekend, said that he “was not concerned” by the threat of electric vehicles imported from China to Europe’s automakers.

He said: “I believe that with our new legislative actions, we have paved the way for a more naive European approach, which takes into consideration the level of emissions from the industry.”

European manufacturers are concerned about the Chinese advancements in EVs. The country is leading the world in battery production, and its automakers outsell western competitors on the domestic Chinese market.

Allianz estimates that while Chinese EV sales in Europe are still at a young stage, they could reach 1,5mn vehicles by 2030 – equivalent to 13,5% of EU 2022 sales.

The simultaneous loss of market shares in China and Europe would have a serious impact on European automakers. These groups are also under pressure due to an EU policy that requires the phase-out of internal engines by 2035.

The new French law is expected to be adopted in full by the end of this year. However, Chinese-made vehicles will probably not qualify for the incentives that are between €5,000-€7,000 per vehicle for new electric cars.

Le Maire explained that he would change the policy. “I spend €1.2bn each year to support green industry, and to support EVs. It doesn’t matter if they are produced by an industry emitting a large amount of CO2, or one emitting less,” he said.

“I am determined to support both the European and French automobile industries.”

Le Maire also said that he would be open to more Chinese direct investments in the European EV industry. China’s XTC New Energy Materials announced recently joint ventures to produce battery materials with French nuclear group Orano.

BYD in Shenzhen is looking at building a factory in Europe . Meanwhile, China’s Envision, in partnership with Renault, is building a battery facility in northern France.

Le Maire said that he expected to see more Chinese investment in France, more specifically in the green transition and green mobility fields. He also travelled to Shenzhen Sunday to meet with the CEOs of BYD XTC.

The Finance Minister, whose trip followed a meeting between Emmanuel Macron and Xi Jinping in China earlier this year, met with Vice-Premier He Lifeng on Saturday, who oversees the economic policy.

Le Maire stated that “China is a vital partner in global growth.”

He said that both sides had agreed to “resolve regulatory discrepancies” in the cosmetics industry, as described by France.

Bloomberg reports that French exporters fear China’s regulatory standards could force them to divulge trade secrets.

Le Maire noted that “the total amount of trade in cosmetic goods to China amounts to around EUR3bn per year,” noting the Chinese market represented 30 to 35 percent of total revenues for French cosmetic companies. “So, I’m talking about more than peanuts.”