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Global EV Transportation Review

Key Regional Markets


The French automotive market’s ongoing transition to electric drivetrain could progressively make it reach a leadership position in the European region. While there are no national targets for electric vehicles, the progress appears to be guided by the European Commission’s goals of phasing out the conventional fuel-based transport. The emerging market demand, as demonstrated in the rapid sales growth, would require timely investments in capacities.

GDP (Current Prices) USD (2021)

2,957.43 bn

GDP Growth Forecast (constant prices) (2021-2025)


EV Penetration

14.4% (battery electric) of the total new passenger vehicle sales in 2022

EV Target

Planned Year of Phasing Out ICE Vehicles

GDP Source: IMF, World Economic Outlook

EV Penetration and Trend

Battery Electric Vehicle Sales and Penetration

Source: Statista (attributed to Avere-France and Comité des Constructeurs Français d’Automobiles (CCFA))

The growth in French electric vehicle market has been propelled by a combination of factors including purchase subsidy support and the rise in price/shortages in Internal Combustion Engine (ICE) vehicles. The sales in total passenger vehicle market by 2022 was a stagnant one, whereas the same for electric vehicles has been buoyant. The shift in demand and sales has been drastic, considering that till around 2017 and 2018, the battery electric vehicle sales in the overall passenger segment constituted a small and niche part of the business. The looming ban on the ICE vehicles by 2035 (in line with European Union targets) too acts as a supporting factor.

Growth in plug-in hybrid electric vehicles declined in 2022, reflecting the gradual shift in balance to battery electric vehicles. Also, the progressively rising market demand has been marked by rise in the number of product varieties at competitive price points. Major automotive brands such as Tesla thus emerged as top contenders, in a departure from recent past when local brands held the market share.

Electrification is also growing at a fast-clip in the public transportation segment in terms of the electric buses. As of end-2021, France was among the top three European countries in terms of electric bus registrations. A total 512 electric buses were registered in 2021. The average sale in the preceding three years was just about 230 units (BNEF estimate). With rising options in local sourcing and a wider choice in product variety, the electric bus orders are much more feasible to fulfill for major entities. It also helps that a project-based funding for the electric buses has helped bridge some part of the costs associated with the electric bus orders.

Charging Infrastructure

Source: Avere-France
Note: Data refers to charging points available for public use during the year. Actual installed base could be marginally higher.

Taking both public and private, the total number of charging points by end-2022 is estimated at about 1.2 million. Growth has been particularly sharp in the recent couple of years, reflecting the emphasis placed by various authorities on catching up in network reach. The public charging network presently enables access equivalent to 122 charging points per 100,000 inhabitants. While this is still higher than the European Union average (107 charging points), it vastly lags the level reached in the Netherlands and Germany among other leading EU countries.

The installed public charging network is largely concentrated between commercial buildings and the public parking spaces – cornering over 70% share in this regard. Also, the network availability is 85% on an average (as of December 2022), though this varies across charging type – in case of fast-charger (150kW) the same was 76%. In any case, the fast- charging capabilities are yet to be enhanced to any significant levels. Over half of the network continues to be operating at less than 7.4kW power rating.

Source: Avere-France

The installed public charging network is largely concentrated between commercial buildings and the public parking spaces – cornering over 70% share in this regard. Also, the network availability is 85% on an average (as of December 2022), though this varies across charging type – in case of fast-charger (150kW) the same was 76%. In any case, the fast- charging capabilities are yet to be enhanced to any significant levels. Over half of the network continues to be operating at less than 7.4kW power rating.

Policy Regulation

Despite lacking a national-level target for zero emission transport, the country must meet European Union’s committed target of banning the new ICE sales by 2035. Various government measures stem from this fact. Subsidies have played an important role as a demand prop. But the government has lately been rationalizing the subsidy allocation. Since January 2023, a maximum €5,000 was fixed for electric passenger vehicle purchases. Earlier, the same was €6,000. The subsidy disbursement, carried out as part of the eco-bonus, was long expected for a gradual tapering.

The available subsidy support is restricted to the battery electric and fuel-cell vehicles with price of up to €47,000 and mass less than 2.4 tonnes. For the leased vehicles, the subsidy coverage is for 27% of the gross price together with the battery cost, within a ceiling of €5,000 for private use and €3,000 for companies. There is no vehicle price restriction in the case of electric vans – for a maximum weight of 3.5 tonnes, the subsidy covers 40% of gross price, with upper limits of €6,000 and €4,000 for private and commercial use respectively. Additionally, battery cost is included in subsidy calculation for leased electric vans.

The subsidy allocation also carries provisions for the low-income households. A maximum amount of €7,000 is available for the battery electric passenger vehicle purchase. For the electric vans, the same is €8,000. Also, the low-income households are allowed a subsidized purchase of used electric vehicles, at €1,000 or €3,000 depending on whether it is a passenger vehicle or van.
There are other incentives through the vehicle scrapping premium. With a certain income threshold, disposing an ICE vehicle during the purchase of the electric passenger transport, makes it eligible for a subsidy of up to €6,000. This is in addition to the rebates already entitled for purchasing the electric vehicle subject to fulfilment of criteria. The plug-in hybrid electric vehicles, in this case, qualify for up to €4,000 in subsidy support. For commercial purchases, the subsidy related to battery-based and plug-in hybrid is €2,500 and €1,000 respectively. In case of the vans, similar income thresholds hold, for subsidy covering 40% of the purchase costs, up to €9,000. In case of disadvantaged households, the upper limit extends to €10,000.

The subsidy regime for the heavy commercial vehicles follows a different approach. Disbursement is based on calls for projects. In 2022, the authorities had one such time-bound scheme, for which the subsidy support was released for specific project applications. For 2023, it will be a similar one. In this process, the expected subsidy support for the electric buses and trucks weighing up to 26 tonnes is €100,000. The previous funding rounds also had additional support for the associated charging system of the heavy commercial vehicles.

Policy-level funding support is also available to encourage charging infrastructure. Starting December 2022, a new scheme with budget of €10 million offers subsidy for installing fast-charging stations at independent petrol stations with annual sale volume of up to 2,500m3, and located in medium or rural density communes. The approved applications under this scheme would qualify for subsidy support ranging 60%-70% of the setup cost depending on rated capacity (50kW or 150kW). Separately, there are fiscal incentives for homeowners setting up their own charging stations. There is a tax break worth about 75% of the expenses incurred, up to €300.

Market Opportunity

The investment momentum in the French electric vehicle ecosystem is gradually picking up, led by the government support and the emerging demand scope. A significant part of the upcoming investments is directed towards battery, battery assembly and related critical components for electric drivetrain. In May 2022, the battery manufacturer Forsee Power commenced production at its 1GWh facility at Poitiers, aimed at meeting the electric bus demand.

Institutional funding is among the support measures extended for the upcoming investments. The €1.5 billion Verkor Gigafactory raised over €250 million funding towards the Verkor Innovation Centre. The financial assistance was led by European Investment Bank. Similar funding support is observed for the adjacent areas of the larger battery ecosystem. For instance, a €30 million government financing was provided for two battery recycling projects. Battery recycling is also expected to be mandatory in coming years, as manufacturing facilities come up.

Capacity Description
ACC 8 A joint venture comprising Stellantis, Total Energies and Mercedes Benz. The facility is expected to start by the end-2024.
Verkor 16 The first phase of production commencement is targeted in 2025. In a later phase, capacity could be expanded to 50GWh, for commissioning by 2030

Focus is also high on the critical raw materials and its supply chain to fulfill the targeted capacity base. Under the 2030 Investment Plan, the government dedicated €500 million to develop an investment fund that could support and sustain the domestic industrial landscape related to critical metals in the battery and electric vehicle value chain. Notably, in October 2022, the French minerals company Imerys announced plans to launch lithium production process at a tentative cost of €1 billion, with construction work expected to start from mid-2023. The planned production could be one of Europe’s largest such mining projects.

The automotive manufacturers meanwhile are stepping up the capacities to prepare for the demand. In October 2022 for instance, Stellantis announced its progress towards doubling the share of electric vehicles in its total vehicle output for French market. Another major entity, Renault is in the process of a massive expansion in its electric vehicle across three locations, to develop a hub of 400,000 units’ capacity by 2025. Notably, the same manufacturer has also been able to significantly ramp up the capacity in electric trucks, to corner a predominant share in the French and overall European market.

A steady expansion in the electric bus fleet, led by the municipal authorities’ procurement, is shaping the market contours for the global and regional players. In February 2022, the Dutch company Ebusco signed a Letter of Intent to set up a new manufacturing plant in France, with an initial capacity of 500 electric buses. An emerging major demand from the various cities and municipal authorities appears to be for converting the existing ICE platform buses to electric through retrofitting. Regulatory backing for the same comes from a government order in 2000, allowing retrofitting of vehicles aged five years or more, without permissions from the original manufacturer. About half of the existing operational fleet meets the retrofitting criterion.


Reflecting in part the trends of mature market, the expansion in the French electric vehicle market is progressively shifting from being policy-led to one of consumer demand. The gradual rationalization in subsidy support is part of the same rationale. The overarching goal of phasing out the ICE vehicles together with the decisive shift in trend towards battery electric vehicle sales, sets the transitionary path for the automotive industry.

The preparedness for the projected vastly outsized electric vehicle stock by 2030 entails a massive investment and expansion in the charging infrastructure. As per ICCT report, about 7 million chargers (including private and public) will be needed by 2030 to match the demand generated by the vehicle unit stock. The same report also pointed out home charging access as being the key factor in managing public charging requirements, besides other factors such as charger utilization rates and business use cases in charging stations.

Note: Projected penetration estimates above are as of November 2021
Source: ICCT

Evidently, the investment opportunity is huge. But of late, the global competition shifted significantly with various countries seeking to attract the technological know-how and its supply chain through a targeted subsidy mechanism. The point in focus is the US Inflation Reduction Act. Its subsidy package, as a mix of tax credits and grants, vastly skew the balance for many prospective investors. The French government has thus been vocal about its concerns in this regard, due to the risk of losing out. The resolution of the emerging scenario may lie in devising conducive and cohesive policy measures in the European Union region.