France extends electric-vehicle incentives until July 2022

PARIS — France is extending until July 2022 current incentives for the purchase of a new full-electric or plug-in hybrid vehicle as well as trade-in bonuses for cleaner new and used cars.

The purchase incentive offers 6,000 euros ($6,900) to private buyers and 4,000 euros to business customers who purchase a new full-electric vehicle costing 45,000 euros or less. All buyers can also get 2,000 euros off the price of a full-electric vehicle costing 45,000 to 60,000 euros.

Full-electric commercial vans are eligible for even higher subsidies – 7,000 euros for private buyers and 5,000 euros for businesses.

All incentives are capped at 27 percent of the total cost. 

Plug-in hybrid vehicles are eligible for 1,000 euro incentives.

A trade-in bonus for new and used electrified vehicles and internal combustion engine models that meet the latest emissions standards offers up to 5,000 euros, depending on household income. The program applies to gasoline cars from 1997 or earlier, and diesels from 2006.  

The incentives were scheduled to decrease on Jan. 1, 2022, to 5,000 euros for private buyers for full-electric vehicles and 3,000 euros for business customers, with plug-in bonuses eliminated entirely. 

Economy minister Bruno Le Maire first announced the extension of the incentives last week on the business network BFM, and minister for the ecological transition Barbara Pompili confirmed the move on Friday. 

Le Maire said the cost of the energy transition overall would be “staggering,” and that state support continued to be needed to defray the costs of electric cars.

France first bumped up incentives for zero- and low-emission vehicles and trade-ins in May 2020 as part of a government coronavirus stimulus. The incentives were cut back this year as part of a plan to gradually eliminate them, but that has been put on hold.

President Emmanuel Macron is up for re-election next year, with the first round set for April, and he has been facing public anger at rising energy prices, including at the gas pump. A plan to raise diesel fuel taxes in 2019 set off the “yellow vest” protests that paralyzed the country’s retail sector for months.

French auto sales have fallen sharply in recent months – as they have across Europe – due to the automotive semiconductor shortage. Full-electric vehicles had a 12.7 percent market share in September, a 70 percent increase from 2020, according to electric vehicle trade association Avere.

Macron affirmed state support for the automotive industry as part of a 35-billion-euro economic plan released earlier this month.

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