2023-10-24 14:27:34
“The State is not going to leave you all alone!”, promised the Minister of the Economy Bruno Le Maire to respond to the concerns of the automobile industry gathered Tuesday in Paris, faced with the “revolution” that it must carry out to go all-electric. In front of an audience of managers, manufacturers and equipment manufacturers gathered for the third edition of the Auto Industry Day at the Carrousel du Louvre, the minister promised to “support the industry” in the face of the need to “pass the thermal century in a few years in the electric century”.
1.5 billion euros per year from 2024
“The role of the State is to be at your side,” he insisted, before recalling its financial investment: 1.5 billion euros per year from 2024 (compared to 1.3 billion l previous year) devoted to the electrification of the park, which will finance electrical bonuses, conversion bonuses, social leasing, etc. He insisted on the state measures which, according to him, will make it possible to combine the transition to electricity, French reindustrialization and economic sovereignty: “As of January 1, 2024, all production of electric batteries in France will be able to benefit from a tax credit”, he promised, to counter manufacturing currently dominated by Asian groups.
These tax credits, promulgated Tuesday morning in the Official Journal as part of the Green Industry Law, also constitute a counterattack to the measures taken by the United States in their major climate plan (IRA), which grants subsidies only to electric vehicles manufactured in North America. “We are the first (in Europe), like what was done in the United States with the IRA, to put in place such an advantageous tax system for the industrial production of new technologies on our territory,” praised Bruno Le Maire.
China “not uncatchable”
This speech comes at a time when the French automobile industry, already a victim of relocation for years, has suffered greatly from the crisis of Covid: vehicle production in France decreased by almost 40% between 2019 and 2020, and has still not returned to pre-pandemic levels (1.4 million in 2022, compared to 2.2 million in 2019). To revive the sector, manufacturers and the government are betting on electric vehicles, while thermal cars will be banned in Europe in 2035. The government has set itself the objective of annual production of 2 million electrified vehicles in France by 2030.
But in this area, France must face tough double competition: that of the United States and that of China, which “has taken five years head start” on electricity, according to Bruno Le Maire, when the Representatives of the sector rather speak of “ten years”. “It is not impossible to catch up, but it requires working hard,” the minister tried to reassure. Concerning electric batteries for example, “not only are we catching up”, but “within fifteen years”, France will produce “the best electric batteries”, he says.
To do this, the minister intends to secure the supply of rare metals necessary for their construction, via the creation of a deposit fund “operational no later than 2024”. “I would like it to represent a total of 1.5 billion euros to secure our national supply of metals, such as nickel, lithium, cobalt, graphite and even titanium,” he said. Half a million will come from the State, he said
“Give and take”
It remains to be seen whether these remarks will really succeed in reassuring the sector, worried since “electricity is no longer an option, but our horizon”, in the words of the president of the Automotive Platform, Luc Chatel. Just before the minister’s intervention in the blue light of a packed room, the latter had warned him: “It’s give and take! You are asking us to change the model, to stop the thermal engines where we are leaders , (…) but we need lasting support.”
The government and the sector must sign a new sector contract within a few days, which will take effect in 2027. Several points still remain to be negotiated, but the sector is sounding the alarm, among other things, on the price of electricity, that he would like lower to gain competitiveness. “We cannot continue to invest in France in automobiles with energy around 150 euros” per MWh, insisted Luc Chatel. “I guarantee you that you will have a price that is competitive,” replied Bruno Le Maire, at a time when the government was negotiating with EDF on this subject.
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