The French government suspends EV subsidies following unprecedented demand

  • French government pauses low-income EV subsidies due to overwhelming demand.
  • Initial budget of €1.5 billion for 20,000 leases raised to 50,000; program resumes next year.
  • Cash incentives of €5,000 to €7,000 offered to car buyers; eligibility criteria include carbon emission limits.

The French government halts EV subsidies after surging demand deems scheme insufficient 

The French government has suspended its subsidised electric vehicle (EV) lease programme for low-income earners for the rest of the year. Launched at the beginning of 2024, the initiative permitted individuals earning less than €15,400 annually to lease an electric vehicle at a highly affordable rate of €100 to €150 per month.

Initially scheduled for an earlier launch, the programme faced delays due to a scarcity of eligible vehicles from French automakers. The government had initially earmarked €1.5 billion for 20,000 leases under the programme for 2024. However, an unforeseen surge in demand has prompted officials to expand the allocation to 50,000 leases for the year. They plan to resume the programme in the following year.

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Simultaneously, the government is enticing car buyers with cash incentives ranging from €5,000 to €7,000 to encourage the adoption of electric vehicles. This incentive programme comes with an annual cost of €1 billion.

To be eligible for both initiatives, vehicles must meet specific criteria, including limits on carbon emissions during their manufacturing and shipping processes. This measure aims to prevent cheaper, Chinese-made vehicles from qualifying for the programmes.

The list of eligible models includes 24 produced by Stellantis and five by Renault. Notably, the Tesla Model Y makes the cut, while its counterpart, the Model 3, fails to meet the criteria. Meanwhile, Dacia, Renault’s budget-friendly brand, finds its Spring model, imported from China, excluded from the list.

This governmental decision highlights the unexpected success of the EV lease programme and suggests a notable shift toward emobility. As the French government adjusts its budget and allocation to meet the escalating demand, questions arise regarding the potential impact on the landscape of electric vehicle adoption in the country. The cash incentives for buyers add another layer to the government’s strategy in promoting a more sustainable automotive future. The overwhelming popularity of France’s scheme surely shows the pivotal effect they have on public adoption. 

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