The Government of France is set to ink a new strategic contract with the automotive industry on Monday as it seeks to boost the country’s electric vehicle push, Bloomberg reports.
Interestingly, the move came as Chinese President Xi Jinping arrived for a state visit amid the intensifying trade tensions.
France to sign a new deal with the auto industry
France will formally ink a strategic sector contract with the auto industry on Monday.
The French government and the auto industry reportedly aim to raise the annual battery-electric vehicle (BEV) sales by fourfold to 800,000 units in 2027.
In addition, the deal also outlined a sixfold boost in annual electric light commercial vehicle sales to 100,000 units.
The government has yet to disclose a specific amount for new subsidies. Nonetheless, it remains committed to supporting electric vehicle purchases and leases.
The contract also seeks to ensure sovereignty by stress-testing local supply chains for critical materials.
“The auto industry is part of our industrial culture and this industry is facing a once-in-a-century change. The transition is difficult, with strong competition from other countries, in particular China, so we need solidarity in the sector.”
French Finance Minister Bruno Le Maire
President Xi visits to tackle EU-China tensions
The new contract between the French government and the auto industry comes as European countries worry about the overcapacity of electric vehicles in China, which continues to affect the EU markets.
The surge of China-made EVs in the region prompted the European Commission to initiate a subsidy probe against Chinese automakers.
All that said, President Xi’s two-day trip to France will primarily tackle the intensifying EU-China tensions. The Chinese leader will meet European Commission President Ursula von der Leyen, according to the report.
The meeting is undoubtedly crucial for both countries, especially now that Beijing has also started launching a liquor dumping probe in January that could mainly harm French cognac makers in the future.
Meanwhile, the French government restricted cash aid to EVs with the lowest CO2 footprint in production. In effect, many China-made EVs were excluded from the list.
Upcoming economic conference
French Finance Minister Bruno Le Maire will speak at a Franco-China economic conference on Monday.
China’s President Xi and France’s President Emmanuel Macron are also expected to address key concerns at the event.
“Europe must adopt a trade policy that protects our industry, our jobs and our technology. I decided to limit bonuses for EVs to cars that respect the strictest environmental norms, quite simply to enhance our production and confront competition that is tougher and tougher, if not ferocious.”
French Finance Minister Bruno Le Maire
The new strategic sector contract will establish a comprehensive framework for cooperation on retraining and expanding the local supply chain. It will also include deploying more charging infrastructures nationwide to support the shift to electric vehicles.
