While the entry point for the EV market is slowly getting cheaper, EVs in the $30,000 range likely won’t be inexpensive enough to get everyday people out of their older vehicles. However, France may have a solution. BNN Bloomberg reports that the French government is readying a plan to make it really cheap to lease an EV rather than own one.
The plan will make full-electric vehicles available for 100 euros ($100) a month, Budget Minister Gabriel Attal said Sunday on LCI television, noting that the cost is less than what many people spend on gasoline. The government is working on how quickly the measure can be rolled out and the availability of EVs, he said.
Macron promised a state-sponsored leasing program for low-income households to counter criticism that even with subsidies, EVs are still out of reach for many.
Among low-cost EVs, the Dacia Spring is available for 120 euros a month in France with a long-term lease; the soon-to-be discontinued Nissan Leaf is available for 139 euros a month, as is the Fiat New 500; and the Renault Twingo for 150 euros a month.
While customers who choose to lease won’t hold any equity in a new car, the simple truth is that a car is a utility for most people, just like electricity and water. Between depreciation, insurance, fuel, registration, and maintenance, there’s a certain monthly cost for private transportation. If you happen to have a paid-off car near the bottom of its depreciation curve, that monthly cost should be fairly low, to the point where a fancy new vehicle is financially unattractive. After all, unless you really love it, why hold equity in a depreciating piece of property? Once you factor in the cost of fuel versus electricity, a 100 euro monthly lease on an entry-level EV becomes quite attractive.
Granted, short-range EVs aren’t for everyone. To get a sense of France’s scale, it’s about 457 miles (737 km) by car from Paris up north to Montpellier in the south. While a range of between 100 and 150 miles on the rather optimistic WLTP cycle sounds brilliant for jaunts from suburb to suburb, short-range EVs aren’t exactly as hassle-free as combustion-powered cars for intercity travel.
However, for suburbanites, urban dwellers, and people simply interested in having a cheap local commuter, spending 100 euros a month on an EV lease sounds like dirt cheap motoring. Plus, there’s another big benefit to this novel lease subsidization program. If it’s successful, it should flood the used car market with cheap EVs in just a few years, providing benefits to both lessees and used car buyers.
So, could a lease subsidization program work in America? Maybe not on short-range EVs as there aren’t many on the market, but I could definitely see a similar program enjoying some popularity. Being able to turn in an EV every few years should alleviate concerns of those who are skeptical regarding long-term EV reliability, [Editor’s Note: Especially long-term battery life – JT] and low car payments would let people currently unable to afford EVs the option of plug-in motoring. In addition, subsidized leases should help ensure a fairly steady stream of used EVs entering the marketplace, critical for down-the-road affordability.
In any case, I have some pretty solid hopes for France’s ambitions. Should this plan make it into law, it could do a better job of bringing EVs to the masses than simple tax credits on new EV purchases. I know that I’d really love a cheap EV lease as a winter car and general urban runabout, so let’s hope that governments of the world have their eyes on France.
Lead photo credit: Dacia