Like many European countries, France offers incentives to encourage car owners to switch to electric vehicles. Under current rules, French consumers are eligible for a credit of 6,300 euros (about $8,400) for purchasing an electric car, but a new bill would more than double the bonus, adding 10,000 euros for current owners of diesel-engine cars if they switch to electric vehicles.
Marie-Ségolène Royal, France’s minister for ecology, sustainable development and energy, submitted the bill to parliament. If passed, it would provide one of the most generous EV credits anywhere, equivalent to almost $22,000 off the purchase price of a new EV. France ranks fifth worldwide in EV market share, according to ABB Ltd. (NYSE:ABB), the U.S. electrical engineering firm.
“It seems that France would like to fight with Norway to be the EV leader of the world,” observed Mark Kane at insidevs.com, a green-car blog.
Diesel passenger cars are far more popular in Europe than they are in the United States, so if the incentive passes, it has the potential to increase the scrappage rates of diesel-burning cars. In place to benefit from a boost in electric car use is France’s own Renault S.A. (EPA:RNO) and its Japanese partner Nissan Motor Col. Ltd. (TYO:7201), together the Nissan-Renault Alliance. Nissan sells the world’s most popular electric vehicle, the Leaf, and Renault offers four electric vehicles that would benefit domestically from the “Made in France” label. A switch from a Volkswagen diesel car to a Renault Zoe compact would be a bargain if France chips in the extra 10,000 euros.
Renault could certainly use the subsidy.
The European car market has been pummeled in recent years, and though EV sales are up by double digits in Europe, most of that growth has been in the wealthier Nordic countries while France has seen a 12 percent drop in electric car sales in the first half of the year. French car sales dropped 4 percent in July and Renault’s new-car sales dropped 6 percent in the same month compared to last year.