PARIS -- The French government has announced plans to offer some of the most generous incentives of any country to buy an electric vehicle. Buyers could be eligible to receive up to 12,000 euros ($13,150).
"This is a historic plan to confront a historic situation," French President Emmanuel Macron said on Tuesday when he outlined the incentives as part of an 8 billion-euro rescue plan for the country's auto industry.
France is setting aside more than 1.3 billion of the sum for incentives. The incentives will bring down the price of a battery-electric vehicle by nearly 40 percent in some cases.
For example, a Renault Zoe that costs 32,000 euros would be 20,000 euros under the most generous case, in which the owner of an older diesel car receives a bonus of 5,000 euros for scrapping it and 7,000 euros toward buying a new electric vehicle.
Nearly all European countries now offer a combination of incentives for low-emissions vehicles, including tax and registration breaks as well as bonus payments, but the French plan outstrips most of them.
France is the first major European country to announce coronavirus stimulus incentives, and the response to Macron's announcement will be closely watched.
Germany, which announced last year that it would increase EV incentives, is expected to roll out its own plan in June.
Macron set an ambitious target of one million EVs produced annually in France by 2025, and the incentives are tailored to help increase domestic demand. Renault and PSA Group have already pledged to increase production, with a full-electric version of the next generation Peugeot 3008 to be built in France, and Renault setting production of two new EVs by 2022.
The incentives announced by Macron will follow two tracks, one for scrapping older vehicles for cleaner, newer models and one for the purchase of new EVs and plug-in hybrids.
The incentives mean that:
- A 6,000-euro government bonus for the purchase of a new EV (costing up to 45,000 euros) will be raised to 7,000 euros until the end of the year.
- Business and fleet buyers can receive 5,000 euros for an EV.
- Plug-in hybrids that cost up to 50,000 euros and have an electric range of at least a 50-km will get a 2,000-euro bonus.
In releasing the plan, the French government cited a number of specific examples meant to show that low-emissions vehicles are within the reach of working-class families.
The buyer of the Zoe who receives 12,000 euros in bonus would have monthly payments of 200 euros, after a 10,000 euro down payment. In addition, they would save 400 euros a year on fuel -- and would remove one ton of CO2 and 5.5 kg of nitrogen oxides (NOx) from the air.
Starting June 1 until the end of this year, the "conversion prime" for buyers who turn in older vehicles will be doubled, to 5,000 euros to buy an EV or plug-in hybrid (with at least 50 km of battery-only range), and 3,000 euros for an internal-combustion engine car, so long as they meet the newest emission standards.
Half of all vehicles now on French roads will be eligible, generally gasoline cars registered before 2006 and diesel cars registered before 2011. In addition, income limits to participate in the program will be relaxed so that 75 percent of French households will be eligible.
The government is expecting to fund about 200,000 purchases under the program at a total cost of 800 million euros.
In a specific example cited by the government, the owner of a 2003 gasoline powered small car could buy a used 2016 Toyota Yaris hybrid for 9,400 euros, with a 3,000-euro trade-in bonus reducing that price to 6,400 euros. The hybrid Yaris would reduce fuel costs by 450 euros a year and remove 0.7 tons of CO2 and 0.8 kg of NOx from the air.