Running head: PESTLE ANALYSIS 1

PESTLE Analysis
Potential of selling a low-cost electric car in FRANCE

Julissa Herrera de Gonzalez

Juanita Guzman Cardenas
Cinthya Jimenez Castro

Niagara College
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Why selling a low-cost electric car in FRANCE is a good idea?

France is the biggest market for electric cars, the development of this kind of

vehicles in France benefit with a lot of incentives from the government like a conversion

bonus and financial incentives that promoted the development. In 2018 just the 2% of

the sold cars in France was electric. Nowadays the EV technology is becoming more

affordable and few purchasers know this (Maximize Market Research, 2020).

The decision makers will have a clear, futuristic vision of the industry as a result

of the analysis of both internal and external factors that could affect positively. By

examining market segments and projecting market size, the study also helps in

understanding the France Electric Vehicle Markets dynamic and structure.

By the completion of this analysis we confirm that selling a low cost electric car

would be a great idea after analysing the actual cars on the market, prices, financial

situation and the country growth plan.

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Political Factors

The government is promoting programs to expand the electric cars market, their

aspirational objectives is to accelerate the adoption of electric cars on the citizens.

According to the Maximize Market Research (2020), “French industrial policy

encourages the development of electric vehicles, with research and development

already underway” the general objective is to have cars more energy efficient with low

cost. The government is improving some subsides to afford this idea.

Economic Factors

France is ranked as the world´s seventh largest economic power, after suffering

one of the sharpest economic contractions among EU countries in 2020 (-8%) due to

the COVID -19 pandemic, France´s economy recovered strongly in 2021 (+6.8%).

(Santander, Santander Trade, 2023).

Social mobility remains low and the employment rates of many disadvantages

groups are poor (Santander, Santander Trade, 2023). According to the French National

Institute of Statistics and Economics Studies (INSEE), the average salary for 2023 is

2,357 euros net per month or 39, 800 euros per year. The range of averages wage is

quite broad, ranging from 1,915 to 7,230 euros per month. Top managers in large

companies, financiers, bankers, programmers and lawyers are the most highly paid

professional. (Davis, 2023).

Considering that earning around 3,200 euros per month it is considering a good

income for individuals or 5,600 for families (Davis, 2023) it is important and beneficial to
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offer an electronic car at low cost to favor the majority of the population that earns the

average monthly salary and cannot afford luxury cars.

Social Factors

France is a good market to sell low-cost electric cars because is an opportunity

for low-income households to change their old car, that is expensive and to maintain.

Another factor that keep France as a potential market to sell low-cost electric cars that

unemployment rate is increasing, so people will prefer to have a car that won´t have an

expense in gasoline. According to The European Investment Bank (2022), 61% of new

car buyers in France prefer a hybrid or electric car in the future.

Technological Factors

A significantly expanded network of charging infrastructure is required in France

due to the country’s fast expanding electric vehicle sector. Public chargers will need to

increase from 31,000 to over 350,000 in order to support the increase from 470,000

electric vehicles on French roads in 2020 to over 8.5 millions in 2027(Maximize Market

Research, 2020). With public and private infrastructure, 5.7 to 6.0 million chargers will

be needed by 2027, which is 15% to 19% less than France’s initial goal. If the 7 million

charger goal set by the French government is achieved, the nation will be five years

ahead of schedule in lighting all new sales by the year 2035.

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Legal Factors

One of the main factors that we must consider in France for the sale of our cars

is the legal factor, as it is not exactly an easy issue.

In France, is a signatory to the Vienna Convention on International Contracts, the

French legal system is complex, so for this reason is recommended that international

laws be used or an arbitration system be called upon. (Santander, 2023).

We can choose an incoterm FOB or CIF to use the appropriate sales

transactions, have a good insurance coverage and be sure that the trade terms are

appropriately applied. (Commerce, 2023).

The languages of domestic contract in France can be French, English or any

other language if both parties are agreeing. If French law is not used, the law of the

other contracting party must be applied (Santander, 2023).

Environmental Factors

Climate change policies are big deal in France and a large part of the population

is really concerned about it, that is why selling low-cost cars in France is a way to

support the commitment of reducing emissions by 40% by 2030. The urban air pollution

is keep going unhealthier which means that an electric low-cost car can be a big help to

reduce the pollution of the air in urban areas. The president of the European Investment

Bank, Ambrose Fayolle settled that French people are changing the consumption habits

due the climate change, they are making conscious choices and behaving in a more

responsible way with the objective of taking care of the environment, so having the

option to buy an electric car is going to be a very attractive possibility.

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References

Commerce, I. C. (2023). International Chamber of Commerce. Obtenido de

https://iccwbo.org/business-solutions/incoterms-rules/incoterms-2020/#block-accordion-

Davis, K. (Jul de 2023). We are developers. Obtenido de

https://www.wearedevelopers.com/magazine/france-average-salary#:~:text=According

%20to%20the%20French%20National,industry%2C%20can%20influence%20this

%20figure.

European Investment Bank (2022). When shopping for a new car, French people say they will

mainly opt for a hybrid or electric vehicle. https://www.eib.org/en/press/all/2022-040-

when-shopping-for-a-new-car-french-people-say-they-will-mainly-opt-for-a-hybrid-or-

electric-vehicle

Human Rights Watch (2021). France Events of 2021.

https://www.hrw.org/world-report/2022/country-chapters/france

Maximize Market Research Pvt. Ltd.

https://www.maximizemarketresearch.com/market-report/france-electric-vehicle-

market/65954/

OECD Better Life Index (n.y). OCDE Better Life Inde in France.

https://www.oecdbetterlifeindex.org/countries/france/

Pecout, A. (2023). Electric cars: France reaches milestone of 100,000 charge points. Le Monde.

https://www.lemonde.fr/en/economy/article/2023/05/06/electric-cars-france-reaches-

milestone-of-100-000-charge-points_6025693_19.html

Santander. (Sep de 2023). Obtenido de https://santandertrade.com/en/portal/establish-

overseas/france/legal-environment

Santander. (Sep de 2023). Santander Trade. Obtenido de

https://santandertrade.com/en/portal/analyse-markets/france/economic-political-outline