30 Oct 18

OEMs boost premiums to go electric in France

Car manufacturers in France are willing to make switching to electric and plug-in hybrid cars easier by contributing to a higher scrappage premium starting next year. The French government wants to extend the scheme from only full-electric and new vehicles to plug-in hybrid and used vehicles.

Since the beginning of 2018, the French government gives scrappage premiums up to 2,500 euro to households who trade in their old car for a full-electric one. In the case of diesels, the scrapped car must be older than 17 years (Euro 1 or 2 standard), whereas petrol cars need to have been on the road for 21 years (Euro 0 or 1). Initially, only 100,000 private vehicle owners were expected to apply for the premium. However, so far, some 250,000 people have claimed the financial support – a number that is expected to hit the 300,000-mark by the end of the year.

Premiums also for PHEV and used cars

For 2019, the French government wants to raise the maximum premium from 2.000 to 2.500 euro for all new and second-hand electric or hybrid cars for the lower-income households. For all others, the premium of 2.500 euro is to be extended to plug-in hybrid cars too, not only full EVs. But it won’t be the tax payer who gets the bill: the OEMs themselves are prepared to bear the extra cost.

BMW, Ford, Kia, Mazda, PSA and Renault have all agreed to chip in, i.e. give a supplementary premium on top of the state’s financial support. The car makers stress the importance of not only raising the premiums, but also paying them out timely. Until today, car makers have been advancing the money of the government’s premium for 70 per cent of their customers.

Interestingly, French Finance and Economy Minister Bruno Le Maire wants the programme to include "vehicles with low emissions, even if they are not plug-in or electric hybrids, as well as second-hand vehicles because new electrified vehicles have a high cost." Details of the new scrappage scheme will follow by the end of November.



Authored by: Dieter Quartier