November 25, 2024

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Hyundai Motor's Kona Electric (Hyundai Motor Group)

Hyundai Motor's all-electric compact sports utility vehicle, the Kona Electric, will continue to be eligible for cash incentives offered by the French government to buyers of electric vehicles.

Paris on Thursday released a list of 78 EVs from 22 brands eligible for the government incentives. According to the announcement, Kona was the only Korean vehicle that remained eligible, whereas Kia’s two hybrid vehicles -- the Niro and Soul -- were excluded from the list.

The new eligibility list reflects the French government’s recently announced EV cash incentive policy that measures the carbon footprint throughout the entire process of car manufacturing from production to shipping. Auto exporters to France were expected to take a hit from the stricter policy.

The subsidy list is based on the sum of carbon emissions across an evaluation of six categories: steel, aluminum, other raw materials, battery, assembly and shipping. Only the EVs with more than 60 out of 80 points are eligible for the French government incentives.

The fact that Hyundai Motor’s Kona is manufactured at the Korean automaker’s plant in the Czech Republic and shipped from there to France is likely to have been a positive factor in ensuring its eligibility for France's EV incentives. But as Kia has been exporting the Niro and Soul from Korea to France, the latter two models are at a disadvantage in terms of their carbon footprints.

Korea's Ministry of Trade, Industry and Resources said Friday that the government will raise an official objection to France's decision, arguing for the inclusion of other Korean EVs on the incentive eligibility list.

"Considering that the revised French incentive policy can impact (Korean auto) exports, the Trade Ministry has carried out working-level talks with the French government over Paris' EV incentive amendments since June," said the Trade Ministry in a statement.

The ministry explained that both sides agreed to a clause that allows companies to submit their calculations of carbon emissions to the French government through an official procedure if there is an objection to France's evaluation of a model's sum of carbon emissions. It added that it will work with the Korean car industry so that the Niro's emissions might be re-evaluated.

French automakers such as Citroen, Peugeot and Renault and other major European carmakers including BMW, Mercedes-Benz, Volkswagen and Volvo dominated the incentive eligibility list. Chinese-made EVs such as Dacia’s Spring and SAIC’s MG, which are among the cheapest EVs available in the French market, were excluded from the list.

About 65 percent of the EVs sold in France made the list. The French government provides a cash incentive of between 5,000 euros ($5,500) and 7,000 euros to EV consumers.

By Kan Hyeong-woo  (hwkan@heraldcorp.com)