France Slashes EV Subsidies By 20% For High Income Earners: Report

France Slashes EV Subsidies By 20% For High Income Earners: Report. Pexels.

The French government slashed subsidies on electric vehicles for the top 50 percent of high-income earners earlier this week. The aim behind this move by Paris is to control budget-related issues and manage expenditures for promoting electric and hybrid vehicle adoption. Therefore, the France government has reduced the subsidy by 20 percent.

Under this new move, the subsidy on electric vehicles (EV) has been adjusted from €5,000 to €4,000 for the top 50 percent of income earners. On the other hand, the subsidy has remained at €7,000 for those with lower incomes.

According to media reports, Environmental Transition Minister Christophe Bechu said, “We are modifying the program to assist more people but with reduced funding.” France, like many other nations, has introduced incentives to encourage electric vehicle purchases but is cautious not to exceed its €1.5 billion budget, especially with potential risks to overall public spending targets.

This move follows the government’s decision to suspend, for the remainder of the year, a programme supporting low-income earners leasing electric cars due to unexpectedly high demand. Though the France government is lowering its purchase subsidy, various regional governments in the country have continued to provide additional electric vehicle incentives, ranging from €2,250 to €9,000.

In December last year, Germany abruptly ended its electric car subsidy programme in the wake of the agreement on savings to overcome the budget crisis after the country’s constitutional court ruled that the plan to transfer 60 billion euros to a special fund earmarked for climate and transformation projects was unlawful.