Competitive levers for French production of small electric vehicles


The French automotive industry has suffered more than two decades of relocation, and domestic production has halved since 2000. At the same time, the market for new vehicles confirms that the transition to electric vehicles has begun. However, we can observe that supply has gradually shifted towards the higher segments, which are more profitable for manufacturers, to the detriment of the climate challenge, the resource issue and accessibility for households.


The ITM and Fondation pour la Nature et l’Homme have set out to assess France’s real competitiveness in the B-segment electric vehicle market, contrary to the prevailing rhetoric, which points to France’s lack of competitiveness as a reason for relocating, and presents electrification as a threat to the French automotive industry, which would be threatened by an invasion of Chinese vehicles.


The study is based on a comparison of the cost price of an electric city car in France, Spain, Slovakia and China, as well as a prospective analysis of the sensitivity to the various levers, including the cost of labour, energy, taxes and the level of subsidies.


To carry out their study, the FNH and the ITM defined a very precise matrix of the cost price of a B-segment vehicle assembled in France, breaking down costs item by item (battery, electric motor, body, doors, chassis, seats….) and taking into account all capital and operating expenditure, labour costs, margins and taxes. This is done throughout the supply chain, from the extraction of raw materials to the assembly of the vehicle. The cost price matrix thus obtained was applied to the three countries studied by varying the following cost parameters for 2028-2030: the price of energy, the cost of labour, the amount of state subsidies and production tax rates. Logistics costs and customs duties were also included.


The results show that, by 2030, France can remain competitive, with the potential to relocate the production of 700,000 city cars and create 25,800 jobs in France.


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Jean-Philippe Hermine