France will sharply reduce subsidies for electric-car purchases in the coming days, with a new scale ranging from 2,000 to 4,000 euros based on income, down from the previous range of 4,000 to 7,000 euros, a government source said on Thursday.
The move is part of broader efforts to rein in public spending and plug a massive hole in the state budget. It adds to carmakers’ headaches as they are already struggling with sluggish electric-vehicle demand.
“The government remains firmly committed to the electrification of light vehicles … but the budgetary context is extremely constrained,” the government official told reporters.
The government also targets total public aid for vehicle electrification of around 1 billion euros (USD 1.05 billion) in 2025, down from slightly over 1.5 billion euros this year.
Roughly 70% of the new amount will go towards purchase bonuses, with the remainder supporting commercial vehicles and funding the so-called social leasing plan for low-income households.
