The EV landscape in France is currently undergoing quite a shake-up due to the introduction of a new environmental bonus on December 16th.

While authorities estimate that only a third of electric vehicles sold will be excluded from this financial incentive, an in-depth analysis of AAA’s data reveals a slightly more disturbing reality. More than 100,000 registrations, which is 38.50% of the electricity marketwere excluded from the bonus.

A market that will collapse in 2024?

According to AAA Data’s forecast for the entire market in 2023, these exclusions could jeopardize the transition to electricity by 2035. Based on the 2023 market, there are over 100,000 registered vehicles that are excluded from the bonus.

To maintain momentum, relevant models will need to fill those units, and excluded brands will need to find ways to regain market share, including by adjusting their prices. This is especially something that the MG brand should do, where the bonus does not apply to any of its models from now on.

A price war is looming, with excluded brands possibly considering raising their prices by up to €5,000 to remain competitive, or risk seeing the electricity market collapse in 2024.

Bonus setbacks could seriously affect electric car leaders in France such as the Tesla Model 3, MG4, Spring and Kia Niro. Reaction from these brands is expected in the coming weeks, and there are already signs of a response. Kia, for example, has offered to extend the €5,000 bonus for its electric Niro until at least the end of the year.

What is the new bonus based on?

Remember that the government has decided to revise the contours of the environmental bonus rules for 2024, including more precise criteria. This new version of the bonus is its focus on cars with the best carbon footprint.

Various environmental criteria are taken into account, such as the materials used, the type of battery, the energy consumption of the factory and the impact of vehicles. In other words, This measure is aimed at eliminating cars made in Chinaincluding the three models mentioned above.

About 65% of electric cars sold in France are eligible for the new bonus. The list can also be found in our special article. This list will continue to grow, particularly with the integration of new models coming to market next year, such as the Citroën ë-C3 and other Renault 5 E-Techs.

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