What’s Next After the Government Cuts the €13,000 Subsidy on Electric Cars?

A month and a half, and then gone. It was better to decide quickly enough to be able to benefit from the super-subsidy of €13,000 from the government, valid for the subscription of a social leasing contract for an electric car. Faced with the success of the offer for electric vehicles for less than €150 per month, the government must turn off the tap for this subsidy. According to an article from Echoes of February 12, 2024, the decree could signal the end of this aid as of Tuesday, February 13.

To benefit from equivalent aid, we will now have to wait until 2025. This leaves a little less than a year for the government to better put together the system, which appeared to be disjointed and ended up worrying the dealers of the brands concerned.

Return to classic LOA/LLD offers: but with what bonus?

The end of the “my electric leasing” system does not necessarily mean that the electric car completely loses its attractiveness. Certainly, many customers – nearly 50,000 according to Les Échos – were able to benefit from the government's help to obtain rents at particularly advantageous prices: from €40 per month for a Renault Twingo, €49 per month for a Fiat 500e or €54 per month for the new Citroën ë-C3.

Beyond these commercial offers restricted to a category of workers with modest incomes, manufacturers have since the end of 2023 brought up to date some quite interesting commercial offers for all. There are 4 models of electric cars available for €100 per month (be careful, good deals disappear quickly):

• Fiat 500 e
• Opel Corsa-e
• Nissan Leaf
• Renault Twingo

Unlike the social leasing system, these leasing contracts sometimes require a significant contribution. Some of these first rents can be partly covered by the deduction of the ecological bonus, or even the conversion bonus. The government must also decide on the amount of this aid, because it has remained on hold since January 1. The end of social leasing will certainly finally allow the government to know how the rest of the budget will be redistributed.

Social leasing has already squandered 43% of the year's budget in just 6 weeks. Suffice to say that it is possible to fear an unpleasant surprise concerning the ecological bonus and other purchasing aid mechanisms dedicated to electric vehicles.

A relief for dealers

If manufacturers were delighted to see customers flocking to dealerships at the beginning of January, some dealers began to become disillusioned at the end of the month. They describe social leasing as “ time bomb “. This is another article des Échos, February 9which highlighted the fears of dealership network bosses.

The first fear concerns the cash flow of dealers. To simplify procedures for customers, resellers manage the advance of funds while waiting for the State to pay the aid in return. However, no one really knows when payment of aid will begin. Past experience with devices of this type does not really reassure automotive groups, because once again nothing is ready. €13,000 upfront for a car is manageable. But for 10 or 100 cars in a single month in the same group, the situation becomes much less comfortable.

The return of electric cars at the end of the leasing period may also be a thorny problem. In addition to the volume of entry-level models which will have to find new buyers at the same time, dealerships fear the condition of the vehicles when they are returned and the conflicts that this could generate with customers.

Finally, will all social leasing customers be able to absorb the increases in the price of car insurance, which are not included in the rent? It's a strange bet, in which some customers wanted to benefit from the price reduction without anticipating what would happen next. This could cause damage.

Car manufacturers have promised their support to dealers to help them get through these different stages. Everyone still hopes for better organization for the 2025 vintage of this aid.