France plans to cut subsidies for electric vehicles by one-third
According to foreign media reports, the 2025 budget proposal submitted on October 10 shows that the French government will reduce subsidies for the purchase of electric vehicles by one-third and will increase penalties for vehicles with higher carbon dioxide emissions.
The French Ministry of Finance said: "Thanks to economies of scale and advances in battery technology, the cost of electric vehicles has fallen, and its share of total car sales has also increased, reducing the need for subsidies."
The department also said: "By 2025, subsidies for the purchase of clean vehicles will be reduced to 1 billion euros (1.09 billion U.S. dollars). It will give priority to providing funding for the most ordinary families."
So far, France's electric vehicle subsidy program has allocated 1.5 billion euros (1.64 billion U.S. dollars), which provides subsidies of up to 7,000 euros (7,634.20 U.S. dollars) for each electric vehicle. In addition, the plan also provides financial services for consumers who lease electric vehicles, allowing low-income families to lease electric vehicles for as little as 100 euros (about 109.06 U.S. dollars) per month.
The French finance ministry did not specify how the cuts would affect subsidies, the number of leases or the share of money allocated to each part of the program.
French auto industry representatives said the country still needs government assistance as electric vehicles stagnate at 17% of sales and that automakers must significantly reduce CO2 emissions from cars they sell if they want to avoid huge European fines.
The French move comes as European automakers struggle with weak global demand and competition from Chinese cars. The budget also calls for penalties for vehicles with emissions above 5g/CO2/km in 2025, and then above 7g/CO2/km in 2026 and 2027.