French President Emmanuel Macron met with Tesla CEO Elon Musk on Monday to discuss electric cars and investment opportunities in France. The meeting took place on the sidelines of a gathering of global business leaders in Versailles, where Macron is trying to attract foreign investment. Musk said he hopes Tesla will make significant investments in France in the future. Macron is still struggling with opposition to his pension reform and is trying to reverse France’s industrial decline. He aims to make northern France a hub for the production of electric-car batteries and related products.
France’s response to US President Joe Biden’s green subsidy plan, known as the Deflation Act, was also discussed. The legislation would provide about $369 billion in grants and tax credits over the next decade for clean energy projects in North America, and has been a point of contention between the US and the European Union. Brussels has said aspects of the bill unfairly discriminate against European companies and is seeking an exemption for them.
Macron’s warmth toward Musk surprised some in the French auto industry, which competes with Tesla as the Texas-based automaker slashed prices on its Model 3 and Model Y models. Shares in Renault and Peugeot-maker Stellantis suffered as investors worried about price cuts. Yet the likelihood of Tesla building another base in Europe in the near future appears slim, as Tesla’s Berlin site is already dialing back battery-making plans.
Macron previously met Musk in New Orleans during his visit to the US last year. They had a “frank” discussion on Twitter about content measurement and discussed the production of electric vehicles and batteries. The two may have discussed cooperation in New Caledonia, a French territory in the South Pacific, where Tesla has promised to buy nickel from a struggling plant backed by the French government, as well as SpaceX, which launches Paris’s satellites. Macron is also trying to position Paris as a tech hub to attract companies like Twitter, which Musk bought last year.
Macron aims to scrap state bonuses to encourage the purchase of electric vehicles when the models have a dirtier carbon footprint, targeting cars made in China. On Tuesday, the government will introduce a legislative proposal as a way to green the industry, detailing bonuses that Macron has said should benefit European manufacturers.
Overall, Macron is trying to restart his second term after the damage caused by raising the retirement age. He announced measures to reverse France’s industrial decline and attract global business to the country, including northern France as a hub for the production of electric-car batteries and related products. While the likelihood of Tesla building another base in Europe in the near future appears slim, Musk said he hopes Tesla will make significant investments in France in the future.
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