Will France be Tesla's next big EU destination? Musk-Macron meet triggers talks

Emmanuel Macron sought to persuade Elon Musk on Monday that France is a leading hub for foreign investments and electric cars as the president tries to attract global business to his country. Macron and Musk, the head of electric-car maker Tesla Inc. and the world’s second-richest person, discussed prospects for development in the electric vehicle and energy sectors at the presidential palace, Macron tweeted.

After also meeting Finance Minister Bruno Le Maire, Musk said he was “confident that Tesla will in the future make significant investments in France," according to Agence-France Presse. “I am very impressed with the welcome President Macron and the French government have given to the industry," AFP cited him as saying.

Earlier, Le Maire had told BFM TV that negotiations with Musk were underway regarding possible investments in France, without providing any details.

Macron and Musk discussed Europe and France’s response to US President Joe Biden’s green subsidy plan known as the Inflation Reduction Act, according to a Macron aide who asked not be named in line with policy.

The law, which will offer some $369 billion in handouts and tax credits over the next decade for clean-energy programs in North America, has been a point of contention between the US and the European Union.

Brussels has said that aspects of the bill would unfairly discriminate against European companies and is seeking an exemption for European firms. The EU is still working to figure out to what the extent the legislation will impact the bloc’s economy.

The encounter with Macron took place on the sidelines of a gathering of some 200 global business leaders whom the president invited to Versailles to showcase his ability to lure foreign investment. Macron, who is still grappling with deep-rooted opposition to his pension reform, said that his guests pledged some €13 billion ($14.1 billion) of new investments.

The meeting with Musk, who arrived in a grey Tesla with wing doors, lasted about 45 minutes. As the encounter got under way Musk, seated on Macron’s left, laughed awkwardly and waved at the camera, keeping his hands on his knees.

Macron and Musk were due to meet again Monday with the other business leaders whom the president convened in Versailles for a round table and a dinner, the aide said.

Macron has been trying to reboot his second term in office after a damaging battle over raising the retirement age that dented his popularity. To do so, he’s announced measures to reverse France’s industrial decline.

Macron said he’d scrap state bonuses meant to encourage the purchase of electric vehicles when models have a dirty carbon footprint — potentially targeting China-made cars. On Tuesday, the government will introduce a law proposal it describes as a way to make the industry greener, which will include details on a bonus that Macron has said should benefit European producers.

Macron’s warmth toward Musk surprised some in the French car industry, which is vying with Tesla since the Texas-based automaker lowered the price of its Model 3 and Model Y models. Shares of Renault SA and Peugeot-maker Stellantis NV have been suffering as investors have worried about the price cuts.

In his push to raise France’s profile among investors, Macron has especially focused on making northern France a hub for the production of electric-car batteries and related materials. Yet the likelihood of Tesla building another site in Europe in the near future appears small.

Negotiations Underway

Tesla’s Berlin site is dialing back plans for battery-making already, as the automaker’s global production network has been expanding at breakneck speed. France had competed with Germany to convince Musk to build the site in Eastern France, in a location that formerly hosted nuclear reactors.

Macron met with Musk during his trip to the US last year, in New Orleans. Back then, Macron said the two had an “honest" discussion about content moderation on Twitter and also discussed the manufacturing of electric vehicles and batteries. The 45-year-old president had criticized the Twitter CEO for relaxing its policies to check content, including on Covid-19 disinformation.

The two may also have discussed cooperation in New Caledonia, a French territory in the South Pacific, where Tesla pledged to purchase nickel from a struggling plant that has been supported by the French government, as well as SpaceX, which launches the satellites of Paris-based satellite operator Eutelsat SA. Macron has also been trying to showcase Paris as a tech hub to attract companies like Twitter, which Musk acquired last year.