Car rates

France is preparing a plan to rent subsidized electric cars at $100 per month

France is preparing a plan to subsidize the rental of electric cars as part of President Emmanuel Macron’s campaign pledge to make them more affordable.

The program will make electric vehicles available for 100 euros ($100) a month, Budget Minister Gabriel Attal told LCI television on Sunday, 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 electric vehicles, he said.

Macron has promised a state-sponsored rental program for low-income households to counter criticism that even with subsidies electric vehicles are still out of reach for many.

The French government is offering subsidies of up to 6,000 euros for the purchase of electric vehicles costing less than 47,000 euros, with possible additional help under a program of scrapping bonuses for old motor vehicles combustion. Electric vehicles accounted for 12% of new car sales in France in the first seven months of 2022. “We know that for many French people they are still very expensive,” Attal said on Sunday.

The leasing measure is expected to benefit European automakers rolling out new electric models, including Renault SA, Volkswagen AG and Peugeot and Citroën manufacturer Stellantis NV.

France will maintain caps on electricity prices until next year in a bid to protect households from spiraling tariffs.

Prices will be “contained” in 2023 and consumers will not be asked to pay the difference between rising costs and current price limits, Finance Minister Bruno Le Maire was quoted as saying by France Info radio on Saturday. The government has capped electricity price increases at 4% until the end of the year.

France’s pledge comes as household bills in the UK are set to jump in October after the cost cap was raised. Faced with soaring electricity prices, the European Union must convene an emergency meeting of energy ministers this winter to discuss bloc-wide solutions and the implications for heating and activity industrial.

Electricity prices in Europe’s two main markets, France and Germany, jumped more than 25% on Friday and are setting records almost daily. These increases are due to a drop in nuclear electricity production in France and the restriction by Russia of the supply of natural gas.

The French government is considering a system this winter for households and small businesses under which they would benefit from preferential electricity tariffs in exchange for an agreement to reduce their consumption during periods of high demand, such as very cold days, a reported AFP.

This has existed for years for large industrial users of electricity, who are willing to reduce their production when the electricity supply is tight.

Europe fears rising energy prices. German Finance Minister Christian Lindner said the government needed to deal with soaring electricity prices “urgently”, as a leading economist warned of a “gigantic shock” to the largest economy in Europe.

The electricity market must be redesigned so that prices are no longer coupled with increasingly expensive gas, generating

billions of euros in profits for operators of wind, solar and coal installations “at the expense of consumers”, he added.

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