France’s new $ 13,000 electric incentive is the most generous in Europe

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PARIS – The French government has announced plans to offer some of the most generous incentives in any country to buy an electric vehicle. Buyers could receive up to 12,000 euros ($ 13,150).

“This is a historic plan to deal with a historic situation,” French President Emmanuel Macron said on Tuesday when he described the incentives as part of an 8 billion euro bailout for the country’s auto industry.

France sets aside more than 1.3 billion of the incentive sum. The incentives will lower the price of a battery electric vehicle by almost 40% in some cases.

For example, a Renault Zoe that costs 32,000 euros would be 20,000 euros in the most generous case, in which the owner of an old diesel car receives a bonus of 5,000 euros for scrapping and 7,000 euros for the purchase of ‘a new electric vehicle.

Almost all European countries now offer a combination of incentives for low-emission vehicles, including tax and registration reductions as well as bonuses, but the French plan exceeds most of them.

France is the first major European country to announce incentives to stimulate coronaviruses, and the response to Macron’s announcement will be closely monitored.

Germany, which announced last year that it would increase incentives for electric vehicles, is expected to roll out its own plan in June.

Macron has set an ambitious target of one million EVs produced per year in France by 2025, and the incentives are tailored to help increase domestic demand. Renault and the PSA group have already committed to increasing their production, with a 100% electric version of the next generation Peugeot 3008 to be built in France, and Renault fixing the production of two new EVs by 2022.

Two-part plan
The incentives announced by Macron will follow two tracks, one for scrapping older vehicles for cleaner, newer models and the other for purchasing new electric and plug-in hybrid vehicles.

Incentives mean that:

  • A government bonus of 6,000 euros for the purchase of a new electric vehicle (up to 45,000 euros) will be raised to 7,000 euros until the end of the year.
  • Business and fleet buyers can receive 5,000 euros for an electric vehicle.
  • Rechargeable hybrids that cost up to 50,000 euros and have an electric range of at least 50 km will receive a bonus of 2,000 euros.

In publishing the plan, the French government cited a number of specific examples intended to show that low-emission vehicles are within the reach of working-class families.

The buyer of the Zoé who receives 12,000 euros in bonus would have monthly payments of 200 euros, after 10,000 euros of down payment. In addition, they would save 400 euros per year on fuel – and remove one tonne of CO2 and 5.5 kg of nitrogen oxides (NOx) from the air.

From June 1 to the end of this year, the “conversion premium” for buyers of old vehicles will be doubled, to 5,000 euros for the purchase of an EV or a plug-in hybrid (with at least 50 km of autonomy only on battery), and 3,000 euros for a car with internal combustion engine, as long as they comply with the latest emission standards.

Half of all vehicles currently on French roads will be eligible, generally petrol cars registered before 2006 and diesel cars registered before 2011. In addition, the income limits for participating in the program will be relaxed so that 75% of French households are eligible.

The government plans to finance around 200,000 purchases under this program at a total cost of 800 million euros.

In a specific example cited by the government, the owner of a small gasoline-powered car from 2003 could buy a used 2016 Toyota Yaris hybrid for 9,400 euros, with a trade-in bonus of 3,000 euros reducing that price to 6,400 euros. The Yaris hybrid would cut fuel costs by € 450 a year and remove 0.7 tonnes of CO2 and 0.8 kg of NOx from the air.

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