Electric car: Macron wants to impose it at all costs

Posted on October 25, 2022


Another “Whatever it takes”

Said and done: after having announced its ambition to build one million electric cars in France by 2027 and two million by 2030, the government bonus will soon increase from 6,000 to 7,000 euros. That is, the State, which still does not have a penny in advance, will lend enough to pay all the bonuses, one million by 2027, two million by 2030, that is, 7 billion or 14 billion respectively.

And so we go with the billions that will have to be paid with interest that goes up, that goes up… But let’s not worry: the current president will no longer be in charge when the payment is made. And the unfortunate French who will not have bought the two million electric cars that will be manufactured in France, according to the president, will be about 67 million to be asked to refund that jackpot, which is added to all the jackpots corresponding to the other QuoiQuilEnCoûte by Emmanuel Macron and his predecessors.

A myopic view of the global market

So that’s the financial side of it.

But by the way, is it very realistic for a president of all French people to suddenly decide on the manufacture in France of millions of electric vehicles?

One economist, Flavien Neuvy, director of the Cetelem car observatory, thinks not. His argument: the world’s biggest market for electric cars is China (2.4 million electric cars registered in China in the first half of 2021, 63,905 in France at the same time). The Chinese are 15 years ahead of us and benefit from extraordinarily advantageous cost prices compared to French cost prices. They are, therefore, those who intend to conquer the world market and who will make the most of the bonus in France, selling their electric cars at prices that defy competition from local manufacturers.

The completely myopic view of the market that the president shows us is not new: the precedents, intoxicated by the powers conferred on them by the French Constitution, also thought of shaping the French market according to their own fantasies without worrying too much about the state of the market. global competition. So, in a different field, computing, IBM’s first competitor, Machines Bull, would become one of the world leaders in computers with the Plan Calcul launched by General De Gaulle in 1966: it was a complete fiasco. , and Valery Giscard D’A Estaing closed it in 1975, but launched the Minitel project, resumed and expanded by François Mitterand. This project was also a major fiasco that also delayed the adaptation of the French to the use of Internet search engines.

Later, still in the field of computing, François Mitterand promoted Computing for All, launched by Laurent Fabius in 1985. This too was a complete failure, and the plan was abandoned in 1989.

Each time, the process is the same: faced with a problem that concerns several areas that are often very technical, and although it has no competence in these areas, the policy invents a solution based on billions of public money that reflects what he understood of the project and above all what flatters the voter. And each time, the wonderful plan falls apart miserably after costing a crazy moneybecause one or more essential factors were not properly considered.

The electric car, a new way to lose money

Here’s one of those factors: to equip these electric cars, you need batteries that account for about a third of the vehicle’s total manufacturing cost.

Hence the (brilliant) idea of ​​a new European plan called airbus batteries, which has already put at stake the trifle of around 8 billion euros. The plan is to establish a European value chain for lithium batteries. It is true that at the moment this important part of the electric car mainly comes from Asia. In fact, currently only 1% of the world’s production of lithium-ion cells comes from the European Union.

We don’t have a brilliant and unique process to manufacture these famous batteries or recycle them, but we have already chosen the location of future factories (France, Germany and Sweden) and even their generic name (gigafactories) because it is easier and cheaper to innovate in vocabulary than in everyday reality.

The choice of countries that will host or will host these gigafactories it reflects well the political origin of the project and is a pretty sure indication of its future failure. Indeed, while car manufacturers have long understood that the cost of manufacturing cars is essentially labor and that it is therefore necessary to invest in countries where it is least expensive, politicians have attacked again and have chosen where it is more expensive (but where your constituents live, etc.). However, let’s be honest: some European manufacturers have invested in factories in China. They understood this aspect of the problem. But not the politicians.

There are 17 European companies participating in the project. Among them, Stellantis, Saft (a subsidiary of TotalEnergies), BMW, Mercedes, BASF and Solvay. I’m not going to insult these companies by suggesting they believe in the success of this project, given what I’ve just said. On the other hand, I know them well enough to know that they follow the scent of public money like police dogs, and that they will know how to take advantage of it, even if the project fails.

In my opinion, the only question that remains is how long it will take for the decision to abandon the project. As it is a European project, it can take a long time.

On the other hand, the Chinese takeover of the world market, in particular the European market, is likely to be rapid because they have many assets that European manufacturers do not, including 15 years of experience and, above all, a cost of labor. .

The global electric car market

The graph below, according to the figures provided by Wikipedia, shows that the market has currently developed mainly in China, which represents more than half (56%) of the world records in 2021. We can see in this graph an evolution without growth for 3 years (2018 – 2019 – 2020) from Chinese records, which can probably be attributed to the covid years.

The second market is represented by Europe, which follows a steady growth, putting it at half the level of Chinese registrations in 2021. Europe is followed by the United States, whose market is 70% dominated by Tesla, which bets on heavy vehicles. and luxurious models. The reason is that in this country distances are important and that, therefore, a very large real autonomy is needed, provided by large batteries. Vehicle dimensions are determined by those of the battery. Geographically, registries are developing primarily in California due to particularly favorable legislation in that state.

All other countries together represent an almost insignificant total in relation to these three geographic regions.

Note, singular fact, that this is the first time in history that a global commercial development is organized at the same time on the globe by the authorities of each country. The main engine of market growth is, in fact, government subsidies for the purchase of an electric vehicle, and this engine is in the process of proving its effectiveness. In 2016, it accounted for nearly half of the vehicle purchase value in Denmark, a third in South Korea and Ireland, and a fifth in France, the United States and Japan.

Here is a summary of this help in some countries:

Public aid for the electric car – 2016
Denmark South Korea Ireland China France UK
15,260 10,350 10,000 7,221 6300 6,022
Japan United States Spain Germany Italy Portugal
5,976 5,512 5,500 4,000 3,000 519

However, government aid is subject to conditions that vary from country to country. For example, in the United States, they only apply to electric cars built in the United States. Most are also degressive and must leave after a certain time, or when the number of registered electric cars exceeds a certain number.

The reasons for the development of the electric car

The main reason announced for this aid is the climate emergency.

Indeed, if the source of electricity for recharging is carbon-free, the electric car is certainly a means of transport that can be considered ecological, without forgetting, however, that the very manufacture of the vehicle involves CO2 emissions much higher than those of a vehicle combustion engine, mainly due to emissions related to battery manufacturing. This last point leads to the fact that an electric car must travel between 30,000 and 50,000 kilometers before reaching the stage where it has compensated for the CO2 emitted by its manufacture.

In the main countries where the purchase of electric cars is developing, electricity is not carbon-free, with the exception of a few countries, notably France, Norway, Sweden and Denmark. Let’s say that government measures from other countries are prediction not to say that some of them just do like the others, but that the measures they adopt in favor of the electric car will not have an impact on the climate.

As far as China is concerned, one can imagine that another strong reason led the Chinese government to favor the electric car: it has few oil resources and, therefore, becomes a major oil importer, which makes it dependent on other countries. . The electric car is therefore a powerful way for this country to eventually reduce its oil imports.

We measure the satisfaction rate of electric car buyers. This is particularly high: thus, at Renault, it reaches 98% for the Renault Zoe and 95% for the Kangoo ZE, against 50% on average for internal combustion vehicles. In the United States, a survey by the journal consumer reports puts Tesla’s Model S at the top of satisfaction ratings, ahead of the Porsche Boxster and Cayman, Corvette, Dodge Challenger and other luxury sports cars. (source)

We can therefore imagine that the current enthusiasm for electric cars is mainly due to people convinced in advance, which explains this exceptionally high satisfaction rate. However, it is possible that this attitude is reserved for this single cluster of buyers, which would be equivalent to considering that the accessible market is limited to this cluster, which perhaps represents only 20% of vehicle buyers.

Furthermore, the de facto ban on thermal vehicles after 2035, voted on by the European Parliament this summer, has yet to be ratified by each of the European countries. It is possible that several countries, firstly Germany, refuse this ratification, which would eventually lead to reserving the electric car instead of the second vehicle for daily use, leaving the first thermal or hybrid vehicle for travel.

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