The success of the 100-euro electric car, a headache for public finances

A poisonous success? During a trip to a Stellantis dealership in Joinville-le-Pont (Seine-et-Marne), Christophe Béchu, the Minister of Ecological Transition, welcomed the enthusiasm for social leasing on Monday. This government measure is intended to financially support the most modest households for the acquisition, or at least the long-term rental, of an electric car. The idea developed by Emmanuel Macron during the 2022 presidential campaign was to make it possible to acquire a battery-powered vehicle for a monthly rent of around 100 euros per month. The measure was launched last December. But in reality, due to the variety of the fifteen models offered, rents vary from 54 euros for the Citroën ë-C3 to 149 euros for a Jeep Advenger or a Peugeot e-2008.

According to the Minister of Ecological Transition, 90,000 French people wanted to be “kept informed” of the terms of social leasing and 35,000 were contacted by concessionaires to integrate this system open to the most modest households (with a reference tax income of 15,400 euros per share per year) and traveling more than 8,000 km per year.

Problem: the Élysée and Bercy had mentioned in mid-December a volume of 20,000 to 25,000 social leasing files in 2024. It is true that the system is expensive for the State, which finances it to the tune of 13,000 euros per vehicle. Has the government decided to open the 2024 budget strings a little wider to finance 35,000? It seems that the various ministers concerned by this measure are not in tune.

When the government launched social leasing, the lack of availability of electric cars meeting the new environmental criteria seemed to be a barrier. Indeed, since the end of last year, the State no longer subsidizes cars produced in Asia or the United States whose total CO2 emissions exceed a certain threshold. But a month after the implementation of the leasing vehicle reservation platform, manufacturers are scrambling to place their cars.

Stellantis offers nine. The group led by Carlos Tavares even put the Peugeot e-208 in its basket even though it assured last summer that this model would be too expensive to benefit from it. The group is pleased today to have 20,000 orders already registered: “Stellantis is achieving 80% of the volumes planned under the initial system, demonstrating that its leasing offer is relevant and affordable”, prances the group.

Renault, which had only offered two models, the electric Twingo (at the end of its life) and the Megane E-Tech, finally added the ZOE (also at the end of its life) and the Kangoo. The Korean Hyundai also raised its finger with the electric Kona manufactured in the Czech Republic. Everyone is looking to take advantage of this great boost from the State for their battery cars at a time when orders are thin.

“We are talking with the dealers. We are in the process of consolidating these availabilities,” underlined Christophe Béchu, recalling that the initial volume of 25,000 rentals had been established “taking into account the availability of vehicles”, which has since evolved. But while Christophe Béchu is enthusiastic, Bercy calms the enthusiasm. The budgetary envelope intended to support the purchase of electric vehicles - which includes the ecological bonus (that accessible without income conditions or that with income conditions), social leasing, the envisaged aid for the acquisition of a electric two-wheeler…- will not exceed 1.5 billion euros, reminds Bercy. If the number of beneficiaries of social leasing increases, it will be to the detriment of the number of beneficiaries of the ecological bonus. And perhaps we will have to eliminate two-wheel customers to stay on track. These budgetary communicating vessels will be studied closely in the coming days. The results of the clever dosage are expected next week.