Posted on Jul 26, 2020 at 5:51 p.m.
Barbara Pompili will not have been followed. Last Thursday, the new Minister of Ecological Transition had expressed the wish that diesel cars are no longer eligible for the conversion bonus, while specifying that arbitration was in progress. In the end, the new version of the device, which his ministry presented in a press release on Saturday evening, provides for a premium for 100% electric, plug-in hybrid, but also thermal models, that is to say gasoline or diesel. The scale has, however, been lowered overall, and the eligibility criteria have also been tightened.
The conversion bonus, which consists of encouraging the purchase of a new or recent vehicle in return for the scrapping of an old model, is a device that has existed for a long time . But the income conditions to benefit from it reserved it until this spring for modest households.
Exceptional widening in spring
The health crisis having massacred car sales (with in particular a plunge of 89% of registrations in France in April), the government decided at the end of May to extend the measure exceptionally, in order to allow dealers to lock the stocks accumulated during containment.
The level of reference tax income not to be exceeded in order to be able to benefit from it was thus increased from 13,500 to 18,000 euros per share, which covered “nearly 3 quarters of the population” according to Bercy “. The type of vehicles likely to be scrapped had also been revised upwards: it includes gasoline vehicles registered before 2006 and diesels before 2011.
The ceiling reached at the end of July
The amount of premiums, finally, had been revised upwards, with 3,000 euros for the purchase of a new or recent thermal vehicle, and 5,000 euros for an electric or plug-in hybrid vehicle.
Reserved for the first 200,000 beneficiaries, the device was an undeniable success, contributing to the market rebound in June, and to the excellent performance of the second-hand market . As Bruno le Maire had announced ten days ago , the ceiling of 200,000 premiums will be reached by the end of July.
For the future, “we will keep […] an attractive conversion premium to accelerate the reduction in CO2 emissions and the renewal of the French car fleet”, the Minister of the Economy had promised. It is this new device, applicable from August 3 (the previous one remains in force until then) which has just been unveiled.
Return to the initial scale
The main modification consists of a return to the initial scale for the beneficiaries, who will again be the poorest households. To get the boost of 5,000 euros for the purchase of an electric car or a plug-in hybrid, the reference tax income must be less than 6,300 euros, or 13,500 euros if the home-work trips exceed 12,000 kilometers per year. Beyond 13,500 euros, the aid will be 2,500 euros.
The turn of the screw is even sharper for thermal engines. These remain in the system, but buyers who want to benefit from them will have to choose a Crit’Air 1 or 2 model, and justify a tax income of 13,500 euros maximum.
With this targeting, the number of beneficiaries should drop significantly: the Ministry of Ecological Transition plans 200,000 by the end of the five-year term, or as many as the last two months.