Macron Courts Musk Amid Battery Duel With U.S.

 

"PARIS -- French President Emmanuel Macron held talks with Elon Musk on Monday as part of his drive to counter U.S. subsidies and tax incentives that European officials say risk luring away investment in batteries and other technologies pivotal to the energy transition.

Mr. Musk -- head of companies including Tesla, Twitter and SpaceX -- met with Mr. Macron inside the Elysee Palace. He then attended a lunch at the Palace of Versailles, the historic home of French kings, with dozens of other foreign CEOs as part of an investment conference organized by Mr. Macron.

"I'm confident that in the future that Tesla will be making significant investments in France," Mr. Musk said after the tete-a-tete.

Mr. Macron is on a quest to build the European Union into what he calls a "third pole" capable of contending with the economic and military superpowers of the U.S. and China. Only by developing its own industrial policy -- as well as military might -- can the EU become autonomous enough from the U.S. to shape its own destiny, the French leader says.

Mr. Macron's ambitions for Europe, however, are running up against hard geopolitical realities. Sanctions on Russia has left Europe reliant on natural-gas deliveries from the U.S. to partly replace its decades long addiction to low-price fuel from Russia.

And Washington is sending billions of dollars in weapons to support Ukraine's effort.

The French leader landed in hot water with allies in April when he traveled to China for talks with Chinese leader Xi Jinping and called for Europe to develop "strategic autonomy" from Washington. Taking cues from the U.S. on tensions between Taiwan and China, Mr. Macron told reporters aboard his plane, would be "the worst thing" for Europe.

Mr. Macron has also been outspoken in warning about the impact of the Biden administration's Inflation Reduction Act on European industry. Carmakers and battery manufacturers have ramped up plans to build factories in the U.S. to be able to cash in on subsidies provided by the law. The law includes local-content minimum rules to qualify for incentives, reshaping the electric-vehicle industry by pushing companies racing to secure U.S. sources of batteries and their components.

French Finance Minister Bruno Le Maire was cagey when asked if the goal of talks with Mr. Musk was for Tesla to build a car factory like one near Berlin. "If we want these discussions to succeed, it's better for them to remain confidential," Mr. Le Maire said.

In his own meeting with Mr. Musk, Mr. Le Maire highlighted incentives that are being put in place to attract "green industry" to compete with the U.S., including new tax credits for electric vehicles, a ministry spokeswoman said.

"To attract investors, everyone's putting public money on the table. The U.S. is doing it. China is doing it. It was time for the EU to do it, too," Mr. Le Maire said.

The new U.S. subsidies could cost Europe as much as two-thirds of planned capacity from the dozens of enormous battery gigafactories that had been slated to be built in Europe by 2030, according to a report from Transportation & Environment, a European lobby group. Germany, Spain and the U.K. are among the countries with the most projects at risk, the report says.

In France, the government has tried to woo manufacturers to what officials call Battery Valley in the country's north." [1]

1. World News: Macron Courts Musk Amid Battery Duel With U.S. Meichtry, Stacy; Schechner, Sam. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 16 May 2023: A.9.