France grappling with dilemma: Rebounding after the withdrawal of electric vehicle incentives?
In the realm of electromobility, France has been a frontrunner, but recent changes to incentives have cast a shadow over the sector. According to Cecil Coulet, Head of European Public Affairs at Équilibre des Énergies, these modifications have contributed to a decline in the market.
The eco-bonus, a significant aid for electric vehicle (EV) purchases, has undergone substantial cuts as of February 2024. The incentive, which previously covered up to 27% of the purchase cost, is now only available up to 24%. For higher-income households, the reduction has been more pronounced, with the incentive dropping from 5,000 to 4,000 euros.
This reduction in incentives has generated uncertainty, particularly for plug-in hybrids, which have experienced five consecutive months of decline. This trend is reflected in the registration figures, with August 2024 marking the fourth consecutive month of decline in new car registrations, making it one of the worst months in the last decade for the passenger car sector.
The changes have also impacted businesses, as the conversion bonus, which facilitated the transition from polluting cars to electric models, has been modified. This development has raised concerns in key sectors such as transport and logistics.
Political instability, economic, and inflationary crises have further added to the concerns, according to Clément Molizon, General Delegate of Avere-France. He suggests revitalizing the EV market by leveraging new models.
Despite these challenges, there are affordable electric options available. The most affordable electric car in the French region in 2023 was the Dacia Spring, starting at 20,800 euros. Other affordable electric models include the Renault Twingo E-Tech, starting from 25,250 euros, the Leapmotor TO3 at 25,990 euros, and the Volkswagen e-up electric at 27,400 euros.
EVs, however, remain a more expensive option than combustion vehicles, according to Coulet. The price differences between affordable electric models and others on the market are considerable, with luxury cars like the Mercedes EQS exceeding 135,000 euros.
Support programmes for lower-income consumers and developing a second-hand market for electric cars are necessary to make EVs more accessible, emphasizes Coulet. Budgetary continuity and solid commitments are crucial to instil confidence in the sector, asserts Molizon.
While the road ahead may be challenging, the potential benefits of electromobility remain compelling. With the right policies and investments, France can continue to lead the way in promoting sustainable mobility.
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