Macron bets on EVs to save France’s auto industry
Tuesday, French president Emmanuel Macron presented a €1-billion fund to get France’s automotive industry out of its COVID-19 slump. Tellingly, he announced his rescue plan at the Valeo plant in Étaples, which produces 48V electric motors. “We want to turn France into the world’s leading manufacturer of EVs,” Macron said.
Electric vehicles (EVs) are pivotal to Macron’s plan, which is a last-ditch effort to prevent further outsourcing of automotive manufacturing to lower-wage countries, as has happened over the past decade. EVs must become the instrument to “in-source added value (to France),” Macron said.
These are tough times for the French automotive industry. COVID-19 has added to the OEMs’ already substantial woes. Notably Renault has been forced to cut back on models and deepen its alliance with Nissan and Mitsubishi in an attempt to survive the crisis.
Macron’s automotive recovery plan consists of an investment fund to help suppliers to OEMs transform their business, worth around €950 million, with three specific targets:
- €200 million in subsidies for suppliers to speed up their modernisation, automation and ecological transformation;
- €600 million in funding to increase the investment capacity of the suppliers (Renault and PSA will contribute €100 million each to this amount); and
- €150 million in support for R&D.
In a related effort, Macron will support efforts to retrain automotive factory workers to produce EVs.
Airbus of batteries
At the request of Macron, Renault will join Saft and PSA in Automotive Cells Company (ACC), which is currently setting up an R&D facility and a trial production line for EV batteries. ACC, which has already received €850 million from various French authorities, is the country’s contribution to an EU-wide project dubbed ‘the Airbus of EV batteries’. The first of those batteries should roll off the assembly line by 2023.
In another pro-EV announcement, France said it would speed up its rollout of EV charge stations, now aiming for 100,000 units by 2021.
All that adds up to a herculean effort to halt the decline of France’s automotive industry. The question is whether Macron’s bet on EVs will bear fruit in the long run.
- In the short run, his government was able to report a first victory: the Renault-Nissan Alliance has decided to produce its first 100-kWh EV engine in France; a Chinese factory had also been in the running to do so.
- And on Tuesday, PSA reported that by 2022, it will move its production of EV motors and gearboxes from Asia to France. The Group announced that other EV components too are or will soon be manufactured in France as well.
- PSA also confirmed that it would produce the next generation of its 3008, including an electric version, in France.
1 million EVs
All of this dovetails with a commitment made by Renault and PSA to produce 1 million full-electric (BEV) and hybrid (PHEV) vehicles annually in France by 2025. In Étaples, Macron was able to announce that
- PSA would produce 130,000 BEVs and PHEVs in France in 2021, and that
- Renault would quadruple its EV production in France from 60,000 at present to 240,000 in 2024.
If France really does achieve its EV production target, France will indeed be one of the world’s leading manufacturers of electric vehicles. But it remains to be seen whether Macron’s plan will have been enough to save the French automotive industry at all, let alone push its transformation to a substantially EV-manufacturing one.