Electric Mobility: Success of the “Social Leasing” Program in France

February 2024
By Eleonore Para

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The French government launched in January a leasing offer with an option to purchase electric cars for 100 euros per month, aiming to enable low-income households to switch to electric vehicles. The social leasing program successfully met the needs of users. After six weeks of implementation, on February 15, it concluded with 50,000 households benefiting from the electric leasing offer, double the initially anticipated number. The state has announced a renewal for 2025.

Electric leasing involves a lease with a purchase option (LOA), with no initial down payment, at a cost of 100 or 150 euros per month depending on the models (compact/family, excluding insurance and maintenance). The minimum duration is 3 years. It is planned that the state will finance each lease up to a maximum of 13,000 euros through ecological bonuses and an additional premium.

Primarily aimed at supporting electric mobility for commuting, access to the program was subject to certain conditions: having a residence in France, the reference fiscal income per household part had to be less than 15,400 euros, the leasing candidate had to live more than 15 kilometers from their workplace, and drive more than 8,000 kilometers per year as part of their professional activity. Therefore, the program targeted heavy users. Only electric vehicles built in France or Europe were eligible for this bonus.

For the first launch year, a quota of 20 to 25,000 cars was initially planned, with the “first come, first served” rule. Ultimately, twice the number of households, totaling 50,000 vehicles, will benefit from it, with deliveries scheduled for 2024 under the social leasing program. By the end of January, more than 90,000 requests had been recorded.

The social leasing program was suspended by decree on February 12. The surge in demand threatened to deplete the budget allocated for greening the automotive fleet: ecological bonuses, conversion premiums, and leasing would represent a total investment of 1.5 billion euros per year starting from 2024. The cost to the state for the 2024 edition of the social leasing program amounts to 650 million euros. The government will make adjustments to other incentives to maintain the same budgetary allocation.

Buoyed by this success, the government is preparing for the second wave of electric leasing scheduled for 2025.