what to remember about the “social leasing” system

The figures for registrations for the “social leasing” formula, which allows you to rent an electric car for 100 euros per month, were expected. The device is ” a success “ welcomed the Minister of Ecological Transition, Christophe Béchu, Friday January 19, on TF1. Since its launch in December 2023, more than 90,000 people have already requested to benefit from an electric car in this context, announced the minister, and the first vehicle was delivered on Thursday.

Promise of candidate Emmanuel Macron in 2022, the the gestation of this device was long and complex. Despite the ” success “ claimed by Mr. Béchu, the implementation of the project, which is based on a consensus between the State, banks and manufacturers to guarantee its economic viability, preserve industrial sovereignty and adapt to market reality, remains a delicate equation.

What is social leasing?

The social leasing formula, available since the beginning of January, allows less well-off households to rent an electric car for at least three years – 100 euros per month for city cars, 150 euros for family cars –, with an option to purchase . This social offer is open to households who present a reference tax income of less than 15,400 euros per unit. For the moment, it is reserved for “big rollers”, that is to say those who can justify traveling more than 8,000 kilometers per year by car, or live more than 15 kilometers from their place of work. For each vehicle, the State covers the initial contribution paid to the rental company, up to 13,000 euros.

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What is the goal ?

By broadening the base of decarbonized vehicles, this measure aims to green the French automobile fleet, in a country where transport still constitutes the leading sector emitting greenhouse gases (32% in 2022). While the average price of an electric vehicle in Europe reached 65,000 euros in the first half of 2023, according to consultant JATO Dynamics, the system goes against the trend of soaring prices. It makes it possible to democratize the use of these vehicles, by helping low-income households to get behind the wheel of an electric car that they would not otherwise have been able to afford.

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But the 100 euros per month car also wants to favor vehicles manufactured in Europe, which have a better carbon footprint. “The goal is to help you buy electric vehicles rather than products from us”declared Emmanuel Macron in a video broadcast on December 14, 2023.

Where is the device?

In total, “91,000 people” have expressed their interest in an electric car at 100 euros per month on the government platform put into service between December 14, 2023 and January 4, a Friday detailed by the Ministry of Ecological Transition. If it is not certain that these approximately 91,000 people meet the social criteria, nor that they actually go to the dealership, the number of files for which financing is validated remains well below this request. In fact, only 25,000 subsidized vehicles are available this year.

To satisfy as many demands as possible, the government is ” currently working “ with car manufacturers “to see if we can make 30,000, 35,000, 40,000 vehicles”, assured Christophe Béchu on TF1. According to him, it is not a “budget question”. The mobility component of the 2024 finance bill displays an amount of credits of 13.3 billion euros for 2024, an increase of 13% compared to 2023. Of this overall envelope, nearly 200 million will be used to green the park automobile, in particular thanks to social leasing, but also with conversion bonuses.

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What are the limits of social leasing?

Despite the desire to make electric vehicles accessible to as many French people as possible, social leasing risks having a limited impact on the automobile market, given the few cheap models adapted to this location at 100 euros per month. Most manufacturers, including Renault and Citroën, have focused in recent years on the production of high-end cars, such as the Peugeot e-208 or the Renault Zoe, priced over 30,000 euros, which generate better margins.

As for the more affordable new products, which have had low priority until now, they are facing scheduling problems. The Citroën ë-C3 (23,000 euros) and the Renault R5 (a little over 25,000 euros) will not be available before mid-2024 or even the end of the year, while the Twingo (20,000 euros), which should be called “Legend”, should be released in 2025.

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Furthermore, the cheapest models are often of Chinese origin, and therefore cannot claim the new ecological bonus, allocated according to the carbon footprint and thus favoring “made in Europe”. This is the case of the Dacia Spring, although it is among the least expensive on the market.

With the disappearance of the Ministry of Energy Transition, announced on January 11 with the new executive and while Bercy has recovered the energy portfolio, the objective of reducing greenhouse gas emissions – of which social leasing is part – could also face a reshuffling of energy policy issues.

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The World with AFP