France plans to cut assistance for EV purchases, raise penalties
Currently, USD 1.64 billion is allocated to the scheme, which includes a bonus of up to USD 7,634 for an electric vehicle and financing for leasing.
France will cut down its assistance for the purchase of EVs by a third and increase penalties against vehicles that emit high levels of CO2, the government’s 2025 budget proposal says.
“Thanks to the economy of scale and to progress on batteries, the cost of electric vehicles has gone down and their share of total vehicles sold has increased, reducing the need for subsidies,” said the finance ministry. “Assistance for the purchase of clean vehicles will decrease to 1 billion euros (USD 1.09 billion) in 2025….It will prioritize financing for the most modest households.”
Currently, USD 1.64 billion is allocated to the scheme, which includes a bonus of up to USD 7,634 for an electric vehicle and financing for leasing, so that lower-income households can access an EV starting at 100 euros (USD 109.06) per month, according to a report by Reuters.
However, the automobile industry said state assistance was still required because EV sales had stagnated in France, and automakers had to significantly lower vehicles’ CO2 emissions to avoid heavy European fines.
The French government’s budget announcements come amid a spat with China. Last week EU leaders gave the green signal to extra tariffs on electric vehicles from China despite opposition from countries like Germany, where automakers condemned the decision.
The proposed duties of up to 45%, due to be imposed from next month for five years, will cost automakers billions of extra dollars to bring the vehicles into the bloc.
The EU move has also renewed fears of a damaging trade war with China. Leading German automakers BMW and Volkswagen slammed the EU decision. BMW said it was a “fatal signal” for the bloc’s car industry, while VW described it as the “wrong approach.”
But Brussels says the measures are needed to protect European carmakers.
