Electric cars are turning the automobile industry upside down. And in an increasingly globalized market, a new trend is on the rise: protectionism. European manufacturers have been raising their voices for a long time. The United States is determined to attract investment. And, in Europe, France is already attempting to adjust its protectionist measures.
Electric car as a makeover. Electric cars are completely changing the traditional production of automobiles. Companies like Tesla, who were born with it in their genes, have achieved profitability while producing cars with very low fixed costs and at very high speeds.
Traditional European and Western manufacturers try to remove water in a forced march. Managers have long been warning of thousands of layoffs, which are already being carried out. At the moment, to make the product profitable, it is still necessary to sell an electric car much more expensive than a combustion one.
China rises. And with Tesla betting unreservedly on the electric car to the industry and the European Union, China has found its place. For years they have been working to keep the supply chain under their control. The price at which they sell their vehicles is very low, with much cheaper labor (and less demanding regulation) than in Europe.
Its industry is also struggling to survive in view of the trade war that has started within the country. According to Reuters, Airways could be close to bankruptcy and companies like NIO or XPeng could lose thousands of dollars with each electric car sold. Sales of electric cars are skyrocketing and for now, Chinese manufacturers have benefited the most.
Persistent notice. All of this has caused Western manufacturers (and especially European ones) to be reluctant to commit to electric cars. And although Toyota is not satisfied with the path that only this technology leads, it is the Europeans who have fought the most for alternatives.
Manufacturers such as Renault argue that we should abandon Euro 7 because China is already immersed in electric car technology and that imposing stricter limits on combustion models will only drive up costs and put Europeans at a disadvantage. Stellantis CEO Carlos Tavares has raised his voice most often with a very specific message: put constraints on Chinese manufacturers.
America. At the same time, the United States has scrambled to attract investment and talent to build electric vehicles on its soil. Joe Biden has pushed through the Inflation Reduction Act, with very attractive tax benefits for manufacturers.
For now, Ford hasn’t hesitated to focus on upkeep of its workforce in the United States. Volkswagen is already considering continuing to invest in the United States or Canada to the detriment of Europe, and Tesla wants to produce its batteries in Mexico. If a firm makes electric cars, batteries or recycles materials in any of these countries, it would be able to benefit from tax measures promoted by Biden.
France steps in. One of the countries receiving the most pressure to institute protectionist measures is France. Realizing the persistent complaints of Stellentis and Renault, Emmanuel Macron has announced that the next package of aid for the purchase of electric cars will discriminate between models on the basis of their origin.
The specific measures have yet to be specified, but everything indicates that only cars that have been manufactured on European soil will be eligible for the new aid scheme. The reason given is the carbon footprint. According to the president, vehicles and batteries made in Europe will be rewarded because “they have a good carbon footprint”, while countries like China get their energy by burning coal.
everything in the air. At the moment, everything indicates that this is a protectionist measure with which to deter manufacturers such as BYD, which already dominate the table of best-selling electric cars in the world and are significantly increasing their presence in Europe .
There is currently talk of a single digit that will phase out the most polluting vehicles during their production process. However, Macron himself has been in charge of introducing new battery plants that settle in the country and whose investments have their origin in China.
But the biggest question is what will happen to some of the best selling models in the country. The Dacia Spring, the best-selling electric car in France, arrives from China and may run out of support. However, the Tesla Model Y comes from China and from Berlin, how would the two models be discriminated against? Soon we will know all the details of the plan and its possible impacts.