France Cuts Back Electric Vehicle Subsidies Amid Emission Penalty Revisions

The French government plans to cut electric vehicle purchase assistance by a third as part of its 2025 budget, emphasizing aid for low-income households. The auto industry warns reduced incentives could harm electric transition goals and result in increased penalties for high-emission vehicles.

The French government has announced a significant reduction in its assistance for the purchase of electric vehicles as part of its 2025 budget proposal. The move will cut the subsidy by a third, affecting how incentives are distributed among prospective buyers.

The finance ministry explained that the decreasing cost of electric vehicles and increased sales made the subsidies less necessary, but emphasized remaining aid would prioritize low-income households. The current assistance program, which grants up to 7,000 euros for electric vehicle purchases and financing from as little as 100 euros monthly, is set to be adjusted.

This decision has brought concern among French automakers who fear reduced incentives might hamper sales, which currently remain steady at 17% market share. The industry stresses the need for consistent incentives to meet carbon emission targets and avoid penalties, drawing parallels with Germany's experience, where subsidy cuts led to a decline in electric vehicle sales.

(With inputs from agencies.)