T&E recommendations to fulfill the social lease commitment

T&E recommendations to fulfill the social lease commitment

Social leasing is possible. Transport & Environment and IDDRI publish proposals, both financial and industrial, for the promotion of electric vehicles within the reach of more ordinary households.

Transport and Environment and IDDRI publish recommendations to make social leasing a reality. ©adobe.stock/Britta and Ralph Hoppe

It is a promise that is difficult to keep. However Elisabeth Borne, the Prime Minister, reminded us: from the fall of 2023, the government will launch an offer to rent electric cars at affordable prices. Popular social lease promised by Emmanuel Macron during his election campaigns. But if the contours of this offer have not yet been revealed, it is because it also seems like an equation that includes many unknowns.

The Transport and Environment Association and the expert organization IDDRI are jointly proposing an action plan that would allow nearly 900,000 low-income households to benefit from this offer. The plan outlined eight recommendations, involving the Government and manufacturers through the offer of specific vehicles.

Commitments from the Government regarding the development and sustainability of the financing of the device for several years, are strong signals that must convince the builders to commit to the project. Therefore, the latter will no longer be able to see social leasing as a diversion of their productive capacity towards cheaper and cheaper cars. On the contrary, it will be an additional, safe market. For the French car industry, this is an opportunity to be able to produce affordable A and B segment cars, which are currently neglected or produced outside of Europe.“, it ensures Jean-Philippe Herminecoordinator of IDDRI’s Mobility in Transition program.

A ship dedicated to social charter

So far, this social rental offer has come against the price of electric cars, which form its basis. At the end of 2022, the average price of an electric segment A (made up of Dacia Spring, Fiat 500, Renault Twingo or even Volkswagen e-up!) reached 25,000 euros.

Read also: Electric car price pressure

Target offers a few special models, from small cars to compact sedans. All including “essential” equipment and low distribution costs. Two conditions to reduce the cost price of these vehicles by 20 to 30%, according to IDDRI. With a tax guarantee solution of 100 euros for the Renault Twingo or 150 euros for the Peugeot e-208, maintenance is included.

Read also: Stellantis offers its competitive rental offer for certain electric vehicles

For that, “The government must enter into contracts with voluntary manufacturers through an annual call for tenders for the supply of new cars at a reduced price on a series of models adapted to daily needs. The number of vehicles will be defined for a period of 2 to 5 years, and may change according to demand“, you see the T&N survey.

Rental operator intervention

It is still important that these parties commit to car rentals. T&N and IDDRI (based on C-Ways data) recommend that a private or public service provider commit to acquiring these vehicles. The latter would lease them for a period of not less than two years and not more than ten years. This operator will also have to contract with maintenance parties, so that it is included in the tax.

Three types of operators have been identified to play this role: traditional charter players, semi-public organizations with a social mission or regional players.

The government will have to finance 27% of the price of the car, a kind of first tax increase, which more or less corresponds to the current car bonus. He will also be a guarantor in the event of non-payment.

In fact, this strategy replaces the car bonus. Bonus, whose procedure has just been changed, by the President of the Republic on May 11, 2023. He has decided to reserve this support for electric vehicles produced on European soil.

Read also: The car bonus will favor French and European production

Similarly, not all households would be affected. Only four income deductions (maximum 13,500 euros) will benefit from the offer. Those in the first decile (income of 10,000 euros) can claim an increase in support.

Industrial surplus

According to the calculations published in this study, the additional production could reach up to 900,000 vehicles by 2030.

An amount that would represent almost 15% of the cars in the cycle of 2030. It is enough to promise the manufacturers in the additional production available in France.

Get a full analysis of social-rent-2023 – Transport and Environment here