France to prioritize low income families in EV subsidies distribution

21 October 2022

President Macron unveiled more targeted subsidies for electric cars. The revised scheme will focus on low-income families and offer them higher incentives to help with transition to electrified transport.

Until now, France had a subsidy of €6,000 for electric cars, but the revised scheme is taking a tiered approach. Families with lower income will qualify for a €7,000 subsidy, while everybody else will receive a lower support of €5,000. The French government is hoping this will help with the rising prices of electric cars - Dacia Spring has gone up 11% in price this year.

There is a new “social leasing” scheme available for low-income families, it offers fixed lease at €100 per month of a wide range of electric cars. This scheme is unfortunately not available yet as it will be phased in from the second half of 2023.

Subsidies are only one part of a major plan presented by the French President. Both Renault Group and Stellantis announced plans to manufacture and assemble more electric cars in France. At the moment only a small fraction of EVs is either manufactured or assembled in the country, with the majority coming from abroad.

Renault 5 will lead the change from 2024 with the next generation Renault Scenic E-Tech to follow. Both cars will be manufactured in Douai together with the current Megane E-Tech. The following year Renault 4 will join Kangoo E-Tech and both will be produced in Maubeuge.

Stellantis announced it will double the number of electric cars made in France - it will go from 6 models to 12 according to Carlos Tavares, the CEO of the company.

It seems the globalization experiment is well and truly over. In current times and due to economical and political instabilities it does make sense for many countries to bring the manufacturing back from abroad. In the short run it will support economic growth and it will create more jobs, there is absolutely no doubt about it. Targeted subsidies are great help as well since buying a new electric car is out of reach for the majority of hard working families.

For those who oppose subsidies for electric cars as unethical and unfair, I just want to point out that fossil fuels are the most highly subsidized commodity in the world. We spend around 7 percer of the global GDP on subsidies for fossil fuels - over €7 trillion every year or €11 million every minute.

It looks like we will reach 10 million electric cars sales this year, and even if we subsidized every one of them to the tune of €6,000 we would have only spent €6 billion. Heck - if we gave away 10 million electric cars for free at an average cost of €35,000 it would have cost €350 billion or 20 times less than fossil fuel subsidies.

An idea - a wild one - let’s spend the yearly fossil fuel subsidies on electric cars. That way we could give away 155 million electric cars every year absolutely free of charge. Now, that is a way to save the world. And no - I am not going to glue myself to the street or pour tomato soup on any paintings. That would be a waste of a perfectly good soup.

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