In December 2023, the French government kicked off an ambitious program to encourage low-income households to buy electric cars and to broaden the appeal of EVs.
The initiative entailed leasing 25,000 European-manufactured EVs at a monthly rate of €100-150 ($108-160), without any deposit. The response was overwhelming and the government received a staggering 90,000 applications within a few weeks, surpassing the available supply.
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The country offered up to €13,000 of subsidy on each qualifying EV and a leasing opportunity costing €100-130 per month for certain EV models and eligible buyers. However, the number of applications it received far exceeded the supply of EVs, increasing pressure on carmakers to boost production.
A bunch of factors led to the skyrocketing popularity of the scheme. One of them was of course the no-deposit affordable and renewable lease. However, the government seems to have gone above and beyond to ensure the program’s success. It even provided a subsidy of up to €13,000 ($13,950) per EV, with the option to buy the vehicle.
The eligibility criteria also captured a large demographic. The requirements included being at least 18 years old, driving approximately 5,000 miles per year, and residing a minimum of 9 miles away from work. Furthermore, the EV’s retail price couldn’t exceed €47,000, France’s Ministry of Economy, Finance, and Industrial Sovereignty said. Finally, buyers’ maximum taxable household income was set at €15,400 per person.
Initially, the government allocated €1.5 billion ($1.6B) to provide 20,000 leases under the program, which was set to commence this year. However, due to the extraordinary level of interest, it increased the number of lease offerings to 50,000. But the robust response was unforeseen and the government consequently halted the scheme for 2024, with plans to resume it next year.
“It’s a real success story and symbolic of French environmental policy. It is good for the wallet and good for the planet,” an adviser to President Emmanuel Macron told The Guardian. That’s certainly true. From 2022 to 2023, EV sales in France grew by nearly 50%, Avere France data showed. In September 2023, nearly one in five vehicles sold in the country was electric.
This leasing scheme is an extension of France’s “bonus ecologique,” which is equivalent to the federal tax credits in the U.S. Under the ecological bonus, France offers buyers with a taxable income of lower than or equal to €14,098 ($15,000), a subsidy of up to €7,000 ($7,500) while wealthy residents can get up to €4,000 ($4,291) off.
Last year, dozens of models qualified under this program. But to ensure European production and reduce reliance on China, many of them were removed from the list this year. Only a few cars and vans make the list now, some of which include the Tesla Model Y (but not the Model 3), Volvo XC40 Recharge, Skoda Enyaq 60, and Peugeot E-308 among others.
Do you think a similar leasing scheme would work in the U.S.? What could be some of the major roadblocks for such a plan stateside? Leave your thoughts in the comments.
