France’s electric car for €100/month scheme: who is eligible?

Thousands of households in France may soon be able to obtain an electric car for €100 per month under a new scheme promised by President Emmanuel Macron.

During his reelection campaign, Mr Macron stated: “We will deploy an affordable electric vehicle offer [...] putting in place leasing mechanisms to assist households on lower incomes.”

In this way, the president hopes to reduce CO2 emissions while ensuring that all households will still be able to drive a car in zones where old petrol and diesel engine vehicles will soon be banned.

Several car manufacturers, including Renault, MG and Hyundai, have recently launched long-term rental offers, which could work in tandem with the government’s plan.

At least 100,000 vehicles would be available for lease each year, but it is not yet known when the scheme would come into effect.

The initiative should be outlined in the forthcoming Loi de finances rectificative, expected to be adopted at the end of the year, according to new Ecological Transition Minister Agnès Pannier-Runacher.

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Most years there is at least one ‘loi de finances rectificative’ enabling modifications or additions to the financial measures set out in the main budget law for the year adopted at the end of the previous year (ie. in December 2021 for the Loi de finances pour 2022).

“We need a measure which is sufficiently robust to enable people in France to benefit straightaway,” Ms Pannier-Runacher said.

It was initially suggested that the leasing system would also be available to healthcare professionals and young people, although further details on how it would work have not yet been outlined.

This type of state aid, which was first proposed by Parti Socialiste candidate Anne Hidalgo, would join a collection of existing funding sources aimed at helping people to buy an electric car.

Reaching a possible total of around €11,000 before any available regional grants are taken into account, this funding does, however, currently only cover a fraction of the cost of such vehicles.

New Tesla models, for example, normally cost in excess of €100,000, and petrol car options remain much cheaper.

Speeding up production

If more people are to begin using electric cars in France and across Europe, manufacturers will need to speed up production.

The car industry is currently suffering from parts shortages on a global scale, and the price of batteries is rising in line with increasing raw material costs.

Read more: Second-hand car prices to rise in France amid new car part shortages

Vehicles are therefore being produced at a slower rate, and buyers are having to wait up to a year for a pre-ordered new car.

The French government will also need to install more public charging points, the current lack of which “is a significant obstacle for citizens who do not have a garage [at home],” said Fabien Neuvy from the Observatoire Cetelem de l’automobile.

“People on lower incomes are often obliged to move out of big city centres to find housing, and [therefore] drive a low. Issues surrounding autonomy and the fear of a flat battery, are important questions.”

How does car leasing work?

When someone gets a car on lease, they are allowed to drive it for a period of three or four years for a monthly fee, before the manufacturer or dealer takes it back to sell it on.

This can often mean that someone pays less for use of the car than they would if they had bought it on finance, although they can be penalised if the vehicle is damaged or has too many miles on the clock when it is returned.

For example, Nissan offers its Leaf model for €99 per month over three and a half years, with drivers allowed to travel a maximum of 30,000km. It is also possible to rent a Dacia Spring for €120 per month over four years and 40,000km.

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