why should buy-to-let aid focus on small electric cars?

State aid should focus on small electric vehicles and penalize even the heaviest in “zero emissions,” notes the French Strategy, which advises Matignon and joins certain recommendations of the Climate Action Network.

(Finally) getting aids that target the “right” vehicles for the “right” people. France Strategy, an independent agency that advises Matignon, “The electric car: at what cost?” he claims this in his analysis note.

Aids that are currently inactive?

Their observation: In 2021, electric vehicle sales accounted for only 10% of the new market (and about 13% since the beginning of 2022), which should account for 100% of sales in 2035. Europe has effectively banned the sale of thermal cars. including hybrids by this deadline. Although these vehicles are the subject of very significant public aid through mechanisms such as the environmental bonus (7,000 euros last year, 6,000 euros in 2022) or the conversion premium, hence the very low level of “zero emission” sales.

“The current aid for the purchase of an electric car means a high cost per ton of carbon avoided,” sums up the authors of the French Strategy note, with a number of recommendations such as “a finer targeting of the environmental bonus, in particular by limiting it.” to small electric cars”.

Currently, the environmental bonus is limited to the purchase price of the vehicle, with no national system or income conditions. There is currently a ceiling of €47,000 to benefit from a maximum €6,000 subsidy for a 100% electric vehicle. Above this price and up to 60,000 euros, the subsidy drops to 2,000 euros.

Not-so-great “assistance” electric vehicles

Therefore, the weight or size of the vehicle is not taken into account during this assistance. However, since the beginning of the year, we’ve seen quite a few ‘small’ EVs in France’s top electric car sales, notably the Peugeot e-208, Renault Mégane E-Tech and Fiat 500 trio, which only account for a third of sales. Moving up the rankings, we don’t really come across any “big” cars: the Model 3 is fourth, a compact sedan, and the Peugeot e-2008, sixth, remains a small SUV.

Only the Tesla Model Y (4.75 meters and about 2 tons) could fall into the “large car” category, but it is only in 11th place in the electric sales ranking, and only the Propulsion version, which starts at 49,990 euros, remains relevant. reduced to 2000 euros for the bonus.

These vehicles are not cheap at all, especially compared to their thermal equivalents. This is highlighted by several examples in the French Strategy note, even if this additional cost can be partially compensated by the aid, resale price and lower cost of use.

For B segment car (Peugeot 208/Renault Clio/Zoé); the additional cost is thus estimated at 16,000 euros. But its buyer can benefit from 8,800 euros of assistance (bonus, conversion premium, local assistance, etc.), sell it after six years for 4,500 euros more than its thermal equivalent (the additional cost of purchase can still be found in resale) and a saving of 1,200 euros per year in use do it

Direct help to those who really need it

There remains the problem of the initial cost of purchasing an electric car, which is impossible for most modest households to overcome. A point also raised in a recent report by Réseau Action Climat, with 13.3 million people “today in a state of uncertain mobility”, recommended more targeted aid to the French who really need subsidies to go electric.

Among its 19 proposals for the implementation of a “real mobility strategy” in France, the association mentions several ways to improve “social and environmental efficiency”, such as a revised conversion bonus. The table below allows you to quickly see this movement towards increased assistance for the most modest (the bonus for households with a reference tax income of less than 14,000 euros per unit, for example, will increase to 8,000 euros, against 2,500-5,000 euros at the moment) and the elimination of subsidies for the richest.

The Climate Action Network proposals to direct the conversion premium to the most modest households.
The Climate Action Network proposals to direct the conversion premium to the most modest households. © Climate Action Network

According to the environmental bonus, the association proposes a lower ceiling than the current one, giving this aid only for cars under €30,000 “to encourage the purchase of lighter and therefore cheaper electric cars”.

If the amount remaining to be paid after the bailout remains too high, the Climate Action Network proposes the creation of a zero-interest loan and “social leasing” for electric cars only.

It is necessary to join the recommendation of the French Strategy to create “special support for low-income households placed in the second-hand market (for example through leasing formulas) where electricity supply is limited”. We also await the details of Emmanuel Macron’s “lease for 100 euros” to be introduced next year during his election campaign.

Increase the weight penalty, including electricity

The French Strategy and the Climate Action Network also agree on the financing of this public aid, which in particular involves the strengthening of the car malus. A surcharge that should discourage people from switching to the most polluting vehicles and therefore limit CO2 emissions during the transition: the basis of the bonus-malus system since its introduction in 2007.

Whispering in Matignon’s ear, the body thus wishes to “tighten the penalty for emissions and weight, especially for the latter to apply it to electric vehicles”.

The measure “could have a co-benefit to air pollution, larger vehicles that emit more air pollutants than smaller vehicles and require more resources,” the French Strategy notes. An opportunity to remind that electric vehicles “due to their higher weight” can eventually release “primary particles (brake systems, tires, road traffic) in the same mass as their thermal counterparts.”

An aspect of the proposed Euro 7 standard, presented on November 10, which for the first time in Europe’s anti-pollution strategy should take into account emissions of particulates produced by brakes and tires, including electric cars.

The Climate Action Network, for its part, wants to strengthen the weight penalty, which has been in place in France since early 2022, but applies only to a few models. “The 1,800kg weight penalty limit adopted in the 2021 Finance Bill seems grossly inadequate as it covers only 2.6% of car sales” while the 1,300kg limit, excluding electric and plug-in hybrids, “is too low for thermal vehicles It will affect 40% and 18%. of electrical ones”, sums up the union.

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