The reshoring is the process by which companies bring the production and manufacturing of goods back to their original country.
According to estimates from the Automotive Platform (PFA), these efforts suggest that by 2028, approximately 700,000 electric vehicles will be produced in the country.
Applying this procedure in France is crucial as it safeguards the domestic industry against Chinese production and achieves environmental objectives.
Regarding the first reason, the sale of EVs from China is on the rise, accounting for 20% of sales.
In fact, two of the best-selling models in France, the Dacia Spring and the Tesla Model Y, are produced in the Asian giant..
As for the second point, the government of Emmanuel Macron must achieve the goal of “drastically” decarbonizing the economy by 2035 and completely by 2050.
To achieve this, the role of electric vehicles is vital.
In this context, various automakers are looking to establish their electromobility-related factories in France to benefit from the fiscal incentives promoted by the government.
Starting from January 1st, units produced in Europe with a cost below 47,000 euros and a “low carbon footprint” in their production, will receive a bonus of between 5,000 and 7,000 euros for purchase.
What are the firms that go through reshoring?
Renault is investing 2,000 million euros to reshoring the production of electric vehicles in France, bringing value chains placed in other countries.
This investment will be used to build a new battery plant in Douai and upgrade existing production plants in Maubeuge and Flins.
The plant in Douai will have a production capacity of 9 GWh per year and will begin operating in 2024. It will produce batteries for the brand’s EVs and Nissan.
The Maubeuge plant will be upgraded to produce the Renault Megane E-Tech. Operations slated to start this year.
The Flins facility will also be upgraded to produce the Renault Kangoo E-Tech, with production beginning in 2024.
Stellantis, on the other hand, announced a 2,000 million euro investment to relocate electric vehicle production in France.
This investment will include the construction of a new battery plant in Metz and the upgrading of existing production plants in Sochaux and Mulhouse.
The new production plants will focus on high-end EVs such as the Renault Megane E-Tech and the Peugeot e-308.
These investments will create a total of 25,000 new jobs in France.
Reshoring and incentives: the voice of the automotive sector
In parallel with the European Union’s investigation into “unfair” prices of Chinese electric vehicles in the region, France is implementing its own measures to restrict the entry of Chinese electric cars into the market.
The eco-bonus has been introduced and is set to take effect in 2024. However, those units with a “high carbon footprint” may not qualify for this benefit, resulting in fewer foreign electric cars entering the French market.
The criteria for accessing these incentives will be subject to review by the French Agency for Ecological Transition (ADEME).
The PFA supports the government’s actions. Luc Chatel, president of the association, states: “It’s not protectionism; it’s fair competition“.
“Our duty is to reduce emissions at all levels. We have provided the government with a roadmap for decarbonization within the automotive sector,” he adds.
Furthermore, the government is in discussions regarding the publication of an Ecological Plan that sets new objectives for the electrification of transportation.
The government aims for 66% of new vehicles sold to be electric by 2030. In the plan previously presented, this figure was set at 15%.
In accordance with the European Union’s regulations, by 2035, the percentage should reach 100%.
This plan, at first glance, includes plans for the expansion of the charging network, which has already exceeded expectations with over 105,000 public charging points.
These initiatives are expected to boost the local industry through public policies that make investment more attractive.
According to PFA estimates, the localization efforts in place suggest that by 2028, approximately 700,000 electric vehicles will be produced in France.
