![\"\"](\"https:\/\/cdn.ihsmarkit.com\/www\/images\/0324\/changes-in-france-ecological_280320241254490.jpg\")
<\/p>\nThe French government launched a program earlier this year to
\npromote electric car adoption among low-income households, but the
\noverwhelming response exceeded supply. The program offered leasing
\noptions and subsidies, contributing to increased electric vehicle
\nsales. The program includes a carbon footprint incentive penalizing
\nbatteries produced in countries with carbon-intensive grids.<\/p>\n
The original initiative offered leasing options for 25,000
\nEuropean-manufactured EVs at a monthly rate of \u20ac100-\u20ac150, without a
\ndeposit. However, the response was overwhelming, with 90,000
\napplications received within weeks, surpassing the available
\nsupply.<\/p>\n
The program aimed to make EVs more accessible by providing
\nsubsidies of up to \u20ac13,000 per qualifying EV and affordable leasing
\noptions. Eligibility criteria included a maximum taxable household
\nincome of \u20ac15,400 per person and a retail price limit of
\n\u20ac47,000.<\/p>\n
Initially, the government allocated \u20ac1.5 billion for 20,000
\nleases, but owing to the high demand, it increased the number to
\n50,000. However, officials halted the scheme in 2024 with
\nexpectations that it will resume in 2025.<\/p>\n
The program is an extension of France's “bonus ecologique” and
\nhas contributed to a huge increase in EV sales in the country. The
\ngovernment has since announced a 20% reduction in subsidies for
\nhigher-income car buyers of electric and hybrid vehicles, aiming to
\nprevent budget overruns. This decision has raised concerns about
\npotential declines in registrations, similar to what happened in
\nGermany.<\/p>\n
Although the ecological bonus has been instrumental in boosting
\nEV sales, the recent subsidy cut has sparked opposition from some
\ncalling for the need for elected officials to prioritize the
\necological transition.<\/p>\n
<\/p>\n
Ali Adim, senior research analyst for batteries at S&P
\nGlobal Mobility, said: “One of the innovative features of the
\necological bonus is its consideration of the carbon footprint of
\nvehicle components, such as batteries. This incentive not only
\ntargets the curtailment of tailpipe emissions by promoting EVs, but
\nit also aims to lower emissions during the production phase. EVs
\nare associated with significantly higher production emissions than
\ninternal combustion engine (ICE) cars due to their heavy and
\ncarbon-intensive battery packs. The new incentive mechanism in
\nFrance directly addresses this gap and could serve as a role model
\nfor future legislation in other countries and regions. Applying a
\ncarbon footprint threshold to EV components (batteries) could have
\nseveral implications. Batteries produced in countries with more
\ncarbon-intensive grids will be penalized. As a result, all Chinese
\nvehicle models were disqualified for the eco-bonus last year.”<\/p>\n
S&P Global Mobility's Battery Carbon Footprint forecast
\nshows that the average carbon footprint of batteries produced in
\nChina in 2023 was 72 kgCO2-eq\/kWh, higher than Europe's 51
\nkgCO2-eq\/kWh.<\/p>\n
Diana Quezada, senior research analyst for EV charging at
\nS&P Global Mobility, agrees that the government's incentives
\nhave been key in encouraging the installation of EV chargers, given
\ntheir initial low return on investment to the charge point
\noperators. “However, this will change with the increasing mass
\nadoption of EVs in France, which is driven by the growth in the EV
\ncharging network across the country. To this end, the French
\ngovernment's Advenir program remains strategically important as it
\ntargets companies and communities keen on investing in EV charging
\ninfrastructure, especially the publicly available EV chargers
\ninstalled on the roads.”<\/p>\n
Author:
\nAmit Panday – Senior Research Analyst, Supply Chain &
\nTechnology, S&P Global Mobility<\/p>\n
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