France’s eco-bonus shows how we can promote cleaner made-in-Europe EVs

(Transport and Environment, 14 Dec 2023) Models accounting for 26% of French EV sales are set to lose their subsidies under the new green eligibility rules.

In September, France announced new green eligibility rules for awarding electric vehicle subsidies – a first in environmental policymaking. Starting in 2024, the government incentive of €5,000-€7,000 will only be awarded to electric cars with a production carbon footprint below 14.75 tonnes of CO2. [1]

This initiative has many advantages and could be replicated by other European countries. Italy, in fact, has already expressed interest in the approach. But for this incentive scheme to be replicated in an effective and robust way across Europe, the methodology will need some fine-tuning.

Supporting European industry with targeted subsidies

Although the French green bonus aims to reduce the environmental impact of cars and would incentivise clean materials and energy for car production, its goal extends beyond the environmental stakes. It’s a backdoor to promote cars that are made in France and Europe, earmarking subsidies specifically for these models. Indeed, electric vehicles imported from countries with highly carbon-intensive energy mixes, like China, will not qualify for the financial incentive and will lose some of their competitive edge.

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Transport and Environment, 14 Dec 2023: France’s eco-bonus shows how we can promote cleaner made-in-Europe EVs