Struggling with Renewal: Navigating France's Journey Post-Reduction of Electric Vehicle Incentives
In a move that has generated uncertainty in the automotive sector, the eco-bonus, a significant incentive covering up to 27% of the purchase cost of an electric car, has undergone significant cuts as of February 2024. This decision has come at a time when the average cost of an urban electric car in France is around 35,000 euros, while the minimum value for SUVs is about 40,000 euros.
Clement Molizon, General Delegate of Avere-France, has emphasised the need to leverage new models and ensure budgetary continuity. He argues that the reduction in incentives has impacted the stock market today, a sentiment shared by Cecil Coulet, Head of European Public Affairs at Équilibre des Énergies.
The poor performance of EV and PHEV registrations must be understood in the context of a generally weakened automotive market. August marked 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. Plug-in hybrids have been particularly affected, experiencing five consecutive months of decline.
However, France remains committed to promoting electromobility. Other accessible 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. The Dacia Spring, introduced in 2023, remains the most affordable electric car in France, starting at 20,800 euros.
In an effort to restructure its e-mobility subsidies, France will introduce an additional €1,000 bonus for electric cars made and equipped with batteries in Europe from October 1, 2025. This supplements the existing environmental bonus. Meanwhile, previous bonuses like the "bonus écologique" and "prime à la conversion" were discontinued in 2025 and replaced by new aid such as the "Coup de Pouce" with allowances of €3,180 or €4,240 depending on household income.
A social leasing program for low-income citizens was introduced in 2024 but paused due to high demand and is planned to relaunch in late September 2025. These changes aim to promote industrial re-shoring, climate goals, and increase e-car accessibility, thereby positively impacting EV sales and registrations in France.
The decision by President Emmanuel Macron to exclude imported cars from China from the subsidy has not helped in facilitating the transition to electric mobility. Political instability, economic and inflationary crises, have caused concern according to Molizon.
The changes to the eco-bonus have impacted both individuals and businesses. Eligible vehicles now have to meet strict environmental and weight requirements. The conversion bonus, which facilitated the transition from polluting cars to electric models, has also been modified, raising concerns in key sectors such as transport and logistics.
Price differences between electric vehicles and others on the market are considerable, with luxury cars like the Mercedes EQS exceeding 135,000 euros. The right moment to remove incentives for electric vehicles is when the total cost of ownership is on par with that of a combustion vehicle, a point that has not yet been reached uniformly. Despite these challenges, France continues to be one of the leading countries in promoting electromobility.
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