Written by | Eldon's Ring of Law
Edit | Routing Agency
The dust has settled on the French presidential election.
France's current president, Emmanuel Macron, defeated marine Le Pen, the leader of the far-right National Union, by a 58 percent to 42 percent margin in the second round of voting in the presidential election held on Sunday (April 24), becoming the second French president in 20 years to achieve re-election after Chirac, according to Agence France-Presse.
French President Emmanuel Macron was re-elected
This result has been welcomed by investors from all walks of life. They had previously generally believed that if Le Pen was elected, it would have an impact on the French market. The severity of this is even comparable to that of The United Kingdom's Departure and Trump's election as US president.
Among these investors, there are many practitioners in the automotive industry sector.
Judging from the campaign platform previously published by Macron and Le Pen, in addition to the consensus on improving the use of hydrogen energy, there is a big difference in the vision of the French automotive industry between the two.
It is worth noting that the time node of this French presidential election is relatively special.
According to French media reports, the local auto market is currently in the "lowest state of fandom since the establishment of the market statistics mechanism".
From January to March this year, the French automotive industry experienced its worst quarter in history.
During this period, total new car sales in France fell by about 150,000 units from the same period last year to 365,407 units. The year-on-year decline reached 17.3%, such as the first quarter of 2019 before the outbreak of the new crown pneumonia epidemic, the decline was even 34%.
In March, French car sales fell by nearly 20%
At the same time, the outbreak of the Conflict between Russia and Ukraine has caused a negative impact on French automobile production on the one hand, and has also inhibited automobile consumption on the other hand.
At present, many automotive industry practitioners doing business in Russia and Ukraine , such as Renault and Michelin – have been seriously affected. Local production of some important components, such as wiring harnesses, is also at a standstill. The gradual escalation of military conflicts has also caused problems in the supply of raw materials such as cobalt, nickel and aluminum, and the price of new cars has been repeatedly pushed up.
In addition, delays in delivery of new vehicles due to factors such as soaring energy prices, rising oil prices and shortages of semiconductor supplies have also exacerbated industry participants' concerns.
Analysts believe that the situation in the French auto industry will continue to deteriorate until the second half of this year.
They expect that "although the tight supply of chips will be alleviated to some extent, the recent outbreak in China is leading to new disruptions in the supply chain."
In order to reduce the uncertainty of the development prospects of the French automotive industry, Macron and Le Pen's teams have previously communicated with the country's automotive industry agencies, such as the French Federation for the Protection of Drivers' Rights and Interests (Ligue de défense des conducteurs) and the French Automobile Industry Federation (PFA).
Vehicle electrification may accelerate
As an important part of its "France 2030" plan, Macron is betting on the electrification transformation of the automotive industry.
"By 2030, France will produce almost 2 million electric vehicles a year." He recently unveiled the goal in mind.
A good sign for Macron is that the market share of electric vehicles in France is currently increasing. In the first quarter of this year, the market share of pure electric vehicles in the local area reached 12%.
As of now, the number of pure electric vehicles in France is 303,584
At the same time, the transaction price of electric vehicles has increased by 8 times in 5 years. In the past two years, the proportion of electric vehicles in the launch of new cars in France has tripled.
As of now, new energy vehicles, including hybrid vehicles, account for 40% of sales in the country's automobile market, and diesel vehicles account for only 16%. Just a few years ago, cars that used diesel as an energy source still accounted for the majority of new car sales in France.
However, Macron also faces doubts.
In France, there is still a significant gap in the price of fuel vehicles and electric vehicles. At the same time, electric vehicles are more sensitive to the supply chain crisis than fuel vehicles, which will also push their terminal prices further.
As a result, will French consumers still choose electric vehicles?
In order to promote the further development of vehicle electrification, Macron proposed to strengthen France's control over energy and automobile manufacturing at the national level.
A series of specific measures include not only a renewed emphasis on the localization of semiconductor chips, but also the establishment of a super factory in France to produce its own power batteries, modeled on Tesla's approach.
In addition to increasing employment opportunities, Macron values absolute control over battery manufacturing. At present, on an electric vehicle, the cost of power batteries still accounts for nearly 50% of the total cost.
The French side aims to reduce the cost of popularizing electric vehicles by overcoming supply problems.
"We will make the cost of electric mobility more affordable, especially by establishing an electric vehicle rental mechanism to ensure that the poorest families can also afford it." Macron said.
In the "France 2030" plan, the electrification of vehicles is an important goal
The specific measure is that once the customer chooses an electric car at the car dealership, their monthly payment will not exceed 100 euros (about 700 yuan), and the difference will be borne by the state.
Macron's promises come as a surprise — because they seem to be beyond the government's current ability to deliver.
A friend living in France told the routing agency that "the scope of application of this incentive measure 'depends on the conditions', but at present, the official does not specify what the conditions are."
Lowering the threshold for the use of electric vehicles is also seen by Macron as an important step to accelerate electrification.
According to Macron's previous statement, after being elected, the deployment of fast charging stations will be accelerated in France, with the goal of increasing the number of charging stations facing the public to 500,000.
To this end, the French government plans to allocate 5.4 billion euros in public expenditure to decarbonize transportation. That figure is in line with the goals set by French Economy Minister Brono Le Maire at a conference on the French automotive industry in March.
In addition, Macron is not in favor of limiting the rise in fuel prices. But if oil prices rise to the point of exaggeration, he promised to take urgent measures to intervene.
For the ban on the sale of fuel vehicles, Macron said that it will be re-evaluated. He hopes to extend fuel vehicle sales until 2035, especially for rechargeable hybrid models.
Faced with the issue of car electrification, Le Pen seems to be on the opposite side of Macron.
At this stage, Le Pen is not optimistic about the electrification of cars
She has previously argued that driving an electric vehicle remains an obstacle for the public due to the low endurance of electric vehicles at this stage and the charging network is far from fulfilling its promises.
"That's why today, the internal combustion engine – especially the diesel engine – is still the first choice for workers, farmers and ordinary families." Le Pen previously said through its spokesman Jean-Philippe Tanguy that "ecological transformation must be based on trust, not at the expense of citizens' well-being." ”
For the automotive industry, she has focused her commitment on reducing the cost of travel in a broader sense.
Le Pen supports the abolition of the "Low Emission Zone" (ZFE) setting. This area, which is only accessible to vehicles that meet certain emission standards, is what she calls a "no-go zone."
"Environmental protection should be done through incentives, not through discrimination, as is the case today." She said.
At the same time, Le Pen advocated a reduction in the fuel value-added tax and assistance in the development and preparation of biofuels.
"Hybrid vehicles will have a place in the future decarbonization process. They help reduce emissions and fuel consumption. Le Pen said. She said she hopes to slow down the replacement of fuel vehicles by pure electric vehicles through non-forced conversion by 2030.
Economically, Le Pen opposed the establishment of a car insurance surcharge, proposing to nationalize the highway and, through this move, reduce the cost of travel by 10%-15%. She expects the change to add 1.5 billion euros a year to the French treasury.
But Jean-Baptiste Djebbari, France's transport minister, said breaking contracts with existing highway operators before the contract expires would expose the French government to 47 billion euros in damages.
However, when it comes to promoting hydrogen energy vehicles, Macron and Le Pen have a rare agreement.
Macron hopes to use hydrogen energy by creating two electrolyzer gigafactories in France. In addition to the 30 billion euros set out in the "France 2030" plan, Macron also said that an additional 1.9 billion euros will be spent on the hydrogen energy industry.
Le Pen wants to build a clean energy portfolio within the automotive industry that integrates pure electric, hybrid and hydrogen energy.
The reaction of automakers
Macron's positive attitude towards the electrification of the car will undoubtedly have an impact on the strategy of the country's automakers.
A new hydrogen-powered SUV from Renault Group is expected to make its world debut in May this year. This action undoubtedly hints at the group's planning in new energy products.
Renault's upcoming hydrogen energy concept car
According to people familiar with the matter, the new car will still be equipped with an internal combustion engine, but the special thing is that it is powered by hydrogen fuel, rather than traditional fossil fuels.
"The direction of Renault's development is obviously in line with the French official hopes for the automotive industry, especially in the case of hydrogen energy vehicles with 'double insurance' between the two parties to the election." Independent auto analyst Liu Rui said.
In addition, it is reported that Renault is considering splitting the electric vehicle business and the shared mobility business to achieve the purpose of being independent of the fuel vehicle business.
Analysts said that whether it is through the IPO to achieve an independent listing of the electric vehicle business, or through the sale of the fuel vehicle business, only the form of retaining the electric vehicle business, Renault will accelerate its electrification process.
At present, Renault's electric vehicles have a share of more than 20% of the European market. In the next step, the group will continue to expand this advantage.
In line with the Renaulution strategy, the Group will build an electrified product lineup covering the A-Class to C segment through its core brands Renault, premium brand Alpine and economy brand Dacia.
By 2025, Renault wants to increase the share of electric vehicle sales in total new car sales to 65%. By 2030, this figure will reach 90%.
Another major French car manufacturer, PSA Group, now part of the Stellantis Group, will also take advantage of Macron's re-election to strengthen its confidence in the electrification transformation.
According to the plan, the Stellantis Group will be the first to achieve full electrification in the European market around 2028. This means that French car brands such as Peugeot, Citroën and DS will be the main implementers of this strategy.
In addition, the German car brand Opel, which was acquired by PSA Group in 2017, will also be deeply involved in the electrification transformation process of The Stellantis Group and realize its own brand revival accordingly.
Within the Stellantis Group, the French car brands Peugeot and Citroën, formerly part of PSA Group, have jointly developed four electrification platforms with their U.S. partner Fiat Chrysler Automobiles to produce electric vehicles of different sizes.
Collectively referred to as "STLA", these automotive manufacturing platforms will be used to develop and manufacture vehicles with body lengths of 4.57-5.18 meters and body widths of 1.83-2.29 meters.
The STLA platform will support the development of electric vehicles under the Stellantis Group brand
Linda Jackson, CEO of peugeot brands, said that in the future, Peugeot will rely on the above platform to create new models. By the end of last year, the electrification rate of the brand's product line had reached 70%.
Peugeot plans to introduce at least one all-electric or plug-in hybrid version of each of its models. Its goal is to electrify 85% of its products by 2023. By 2025, this proportion will reach 100%.
The DS and Opel brands plan to fully electrify in 2026 and 2028, respectively.
The moment in history that French car manufacturers are experiencing is somewhat "déjà vu".
In Germany, the election of national leaders also has a subtle impact on the automotive industry.
The only difference is that the French president was re-elected, while Angela Dorothea Merkel officially ended her 16-year term as Chancellor of Germany last October.
Last October, Merkel ended a 16-year term as Chancellor of Germany
Some of the established development strategies of the German automotive industry have also shown some hesitation at the implementation level.
Although almost all political parties support the transition to vehicle electrification, there are differences in the choice of route.
Previously, Merkel's party, the CDU, was open to technologies to meet emissions targets, and the party also hoped to accelerate the process by setting a date for the exit of fuel vehicles.
Guided and driven by this view, German automakers, including Volkswagen, Audi and Mercedes-Benz, have set a clear timetable for 2033-2039 for the elimination of internal combustion engines.
However, after SPD member Olaf Scholz became Chancellor in December 2021, Germany's approach to the withdrawal of fuel vehicles became ambiguous.
The SPD believes that the state should support such a transformation of the automotive industry, but should not over-intervene to prevent damage to Germany's position in the global automotive industry.
They prefer to rely on the market regulation mechanism and naturally achieve the goal of transformation.
"Once the price and quality of electric vehicles reach the same or lower level as fuel vehicles, consumers will naturally choose electric vehicles." Scholz said.
German Chancellor Scholz advocates that the future of electric vehicles is left to the market itself
He said that in this process, all the government should do is to give government subsidies to electric vehicles to incentivize related consumer behavior.
In fact, in addition to the Greens, German political parties such as the CSU and the Liberal Democrats have expressed opposition to the government's setting of an internal combustion engine obsolescence time.
Accelerating charging infrastructure, expanding public transportation networks and road capacity to reduce congestion, and using hydrogen and synthetic fuels are the right strategies, they argue.
Write at the end:
Judging from the recent political ups and downs in France and Germany, as well as the corresponding fluctuations in the strategic choices of the automotive industry, promoting the transformation of industrial electrification is not only the most important issue for the automotive industries of the two countries in the next few years, but also the probability of controversy and game in the choice of local policies and paths.
However, Winston Churchill once said, "It is better to quarrel than to fight endlessly."
After experiencing the necessary quarrels, facing the same goal of environmental protection demands for energy conservation and emission reduction, helping the automotive industry grasp the opportunity of electrification transformation and helping domestic auto companies continue to stand on top of the world is still the strongest consensus and hope of the two governments.
As for the subsequent effect and impact geometry, it remains to be seen.
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