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The French Government has released further details of the ‘Bonus Écologique’, its EV subsidy scheme. Under the scheme government subsidies will favour vehicles produced in France and Europe over models made in China. The government released a list of the models eligible for the scheme on the 14th of December. Additionally, on the same day France’s EUR100 per month EV leasing scheme was launched.
Europe Centric EV Manufacturing
The reform makes the subsidy dependent on the CO2 emissions produced during the construction and transportation of the vehicle. The list published on the 14th covers approximately 65% of the vehicles sold in France. Five Renault models are eligible, as well as 24 models from the Stellantis group, which includes Citroën, Peugeot, and Fiat. Notably, Tesla’s Model Y will be eligible for the ‘Bonus Écologique’, however the Model 3 does not qualify. Additionally, vehicles made by China’s SAIC which includes brands such as Dacia and MG, or BYD do not appear on the list published by the French government.
France’s existing EV incentive offers individuals and businesses a grant ranging from EUR5,000 to EUR7,000, dependent on household income. This subsidy applies to EVs weighing under 2.4 tonnes with a maximum cost of EUR47,000. The reformed subsidy will only be available for vehicles published in the approved list from the 1st of January 2024.
The EV leasing Scheme
This scheme offers EV access to certain groups of people for EUR100 or less per month. Effective for a minimum of three years, it targets people who: pay less than EUR15,400 of income tax per year (50% of working households), reside 15km or more from work or travel over 8,000 km annually for professional purposes. Eligible vehicles must meet specified environmental standards, encompassing both new and recently converted cars.
Rho’s Evaluation
The announcement follows on from the German government drastically changing their own EV subsidies. Additionally, it marks a clear step to prevent less expensive Chinese made cars dominating the French market. Recently, the EU received backlash over delaying a 10% ‘rule of origin’ import tariff with the UK for three years, some car makers complained it could allow China’s dominance in the EV industry to grow within Europe. At the same time the EU is also continuing to conduct its subsidy probe into Chinese made EVs in search of unfair competitive advantage. Through this subsidy reform, France is taking its own steps to ensure a European centric EV ecosystem remains dominant.
Additionally, the leasing scheme is aimed at making electric mobility more accessible to wider groups of society. Initially, vehicle electrification was dominated by first movers who tended to be more affluent, now as the transition progresses it is important to make EVs affordable for everyone, allowing continuing EV penetration.
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