France, on Thursday, released a list of cars indicating which vehicles qualify for the country’s newly updated regulations. The new updates cover consumer incentives for buying electric cars, prioritizing vehicles manufactured in France and Europe over those produced in China.
Approximately 65% of electric cars sold in France will meet the requirements outlined in the scheme. Starting Friday, the updated criteria will also consider the quantity of carbon emissions during the manufacturing process of an electric vehicle.
Among the qualifying models listed, 24 are manufactured by the Franco-Italian group Stellantis (NYSE:STLA), while French automaker Renault contributes five models. Notably, Elon Musk's Tesla (NASDAQ:TSLA) Model Y meets the criteria, but its Model 3 does not.
MG Motors, an electric vehicle brand owned by China's SAIC, expressed concern that the revised regulations will exert a negative impact on the French electric vehicle market.
French Finance Minister Bruno Le Maire praised the newly established regulations for their encouragement of automakers to actively reduce their carbon footprint.
"We will no longer be subsidizing car production that emits too much CO2," Marie said in a statement.
The French government previously provided a cash incentive ranging from 5,000 to 7,000 euros to encourage the adoption of more electric cars, amounting to an annual cost of 1 billion euros ($1.1 billion).
However, according to officials from the French finance ministry, due to the lack of affordable electric vehicles made in Europe, approximately one-third of these incentives are being directed to consumers purchasing EVs manufactured in China. This trend has led to a notable increase in imports and has widened the competitive disparity between foreign and domestic producers.
An important shift is expected as many Chinese-made EVs will no longer meet the criteria for eligibility due to China's heavy reliance on coal-generated electricity in its auto industry.
The Ademe agency, responsible for overseeing the process, conducted a comprehensive assessment of nearly 500 electric vehicle models and their various versions to determine their eligibility for inclusion in the incentive scheme.
One of the notable exclusions from the list was Dacia's Spring model, which is imported from China. This particular vehicle from Dacia, known for its affordable pricing as a Renault brand, did not meet the criteria for inclusion.
Shares of STLA and TSLA are up 2.22% and 4.56% respectively in afternoon trading on Thursday.