France halts subsidised EV lease program

The French government has announced the suspension of a program aimed at subsidising electric vehicle (EV) leases for low-income earners for the remainder of this year due to an unexpected surge in demand. The decision comes as a response to the program’s popularity, which far exceeded initial projections.

Since the beginning of 2024, individuals earning less than EUR 15,400 (USD 16,600) annually have had the opportunity to lease an electric vehicle for a monthly fee ranging from EUR 100 to 150. The program was devised as a means to stimulate demand for electric cars among demographics that may otherwise struggle to afford them.

Initially slated to launch earlier, the program’s implementation was postponed until the start of this year due to delays from French car manufacturers in providing a sufficient number of eligible vehicles. Despite the delayed start, the response was overwhelming, prompting the government to reconsider its initial plans.

With an allocated budget of EUR 1.5 billion (USD 1.6 billion), the program aimed to offer 20,000 leases this year. However, in light of the unexpectedly high demand, the government has announced an expansion of the program, increasing the target to 50,000 leases for the current year. The program is set to resume next year as planned. 

In addition to the lease program, the French government is incentivising the purchase of electric vehicles through cash incentives ranging from EUR 5,000 to 7,000. This initiative, costing EUR 1 billion annually, aims to further promote the adoption of electric vehicles across the country.

Both programs have eligibility criteria, including requirements related to the carbon footprint of the vehicles involved. To qualify, vehicles must adhere to specified limits on carbon emissions generated during their manufacturing and shipping processes. This measure aims to ensure that only environmentally friendly vehicles are included in the subsidy programs, preventing cheaply manufactured Chinese vehicles from qualifying.

The list of eligible models encompasses a variety of vehicles, including 24 models produced by the Franco-Italian group and five models by French carmaker Renault. Notably, Elon Musk’s Tesla Model Y is eligible for the program, while the Model 3 is not. However, Dacia, Renault’s low-cost brand, faced disappointment as its Spring model, imported from China, was excluded from the list of eligible vehicles.