The French government has released its proposed budget for 2025, outlining EUR60 billion (USD65.7 billion) in spending cuts and tax increases aiming to manage its fiscal pressures. Among the key measures are significant reductions to the EV assistance program the bonus écologique and stricter penalties for CO2 emitting vehicles through the malus écologique.

Changes to France’s EV subsidy program, le bonus écologique
The budget for the bonus écologique will be reduced from EUR1.5 billion (1.64 billion) to EUR1 billion (USD1 billion) from next year. This scheme has been crucial in promoting the nationwide adoption of EVs by providing subsidies for their purchase and use.
Currently, the program supports two areas. First, it offers up to EUR7,000 (USD7,600) for the purchase of BEVs, FCEVs, and PHEVs that emit less than 50g of CO2 per kilometre. The subsidy applies to vehicles priced below EUR47,500 (USD51,800) and weighing under 2.4 tonnes, with the exact amount ranging from EUR4,000 (USD4,360) to EUR7,000 depending on household income.
Second, the program supports an EV leasing scheme targeted at low-income households. Individuals earning less than EUR15,400 (USD16,800) per year can lease an EV for EUR100 (USD110) per month, or up to EUR150 (USD164) for an electric family car. This scheme introduced in January was stopped after just two months due to its popularity and it reaching its budgetary limits.
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Focus on European made EVs
In December 2023, the government reformed the bonus écologique to focus on subsidising European manufactured EVs, aiming to reduce the share of Chinese made vehicles in the French market. From January, 72 EV models have been eligible for the subsidy, accounting for around 65% of the EVs available for sale in France.
It remains unclear how the reduced EUR1 billion budget will be allocated between the purchase incentives and leasing scheme, or how individual subsidies may change.
Stricter CO2 emission penalties
France is also tightening its malus écologique, which taxes higher-emission vehicles. In 2024, the tax applies to vehicles emitting more than 117g of CO2 per kilometre. The tax, payable upon vehicle registration, ranges from EUR50 for those emitting 118g of CO2 per kilometre to EUR60,000 for vehicles emitting 193g or more.
From next year, the tax will apply to vehicles emitting more than 112g of CO2 per kilometre, with the threshold dropping further to 105g in 2026 and 98g in 2027. The government projects that these changes could generate EUR300 million by 2026.
Update: Following the release of the draft budget, members of parliament voted to remove the stricter CO2 penalties on vehicles instead opting to put higher VAT on gas boilers. (Updated 28/10/2024)
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The budget in the context of market figures
France’s EV market remains promising, with a sales penetration rate of 21%, similar to the UK’s 22% and ahead of Germany, Spain, and Italy, which stand at 17%, 10%, and 6% respectively.
Subsidies play a crucial factor in supporting EV sales growth. Germany’s decision to abruptly halt its EV subsidies in December 2023 has led to a sharp drop in sales throughout 2024. France’s gradual reduction of its incentives is likely to soften the impact on the market. While the cuts are significant, the government’s phased approach aims to prevent the type of market shock seen in Germany, allowing the EV market to adjust more gradually.
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