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"headline": "Social Leasing Could Drive Electric Car Adoption in Europe",
"description": "Social leasing programs are gaining traction in Europe, aiming to make electric vehicles (EVs) accessible to low- and moderate-income households through subsidized leasing. Up to 3 million households could transition by 2032.",
"datePublished": "
Table of Contents
A novel approach to electric vehicle (EV) adoption is gaining traction in Europe: social leasing. This initiative aims to make EVs accessible to low- and moderate-income households through subsidized leasing programs. A recent analysis suggests that up to 3 million households in Europe's five largest economies-Germany, Spain, France, Italy, and poland-could transition to electric cars by 2032 thanks to these schemes.
Did You Know?
France already has a social leasing program in place, offering affordable EVs for monthly rents ranging from €130 to €215 (approximately $140 to $230 USD). These vehicles typically cost under €25,000.
Social leasing programs offer electric vehicles at reduced rents, making them an affordable choice for households struggling with the high costs of customary car ownership. This approach not only addresses financial barriers but also promotes environmental sustainability by encouraging the adoption of zero-emission vehicles.
To put an end to dependence on fossil fuel cars and the threat of rising costs, many households need help switching to electric cars. EVs remain unaffordable even for middle income households,while purchase subsidies too often benefit those who don't need them. Social leasing can make clean, cheap-to-run electric cars a reality for millions who are otherwise stuck with expensive polluting vehicles.
Marie Chéron,E-mobility Specialist
The key to financing these enterprising social leasing programs lies in the EU's Social climate Plans.Member states can leverage revenues from the extension of the EU carbon market to road transport and buildings (ETS2) to fund these initiatives. The analysis indicates that up to €16 billion could be available across the five countries studied by 2032 to support social leasing.
Pro Tip
Front-loading some of the ETS2 revenues to 2025 and 2026 could help bridge the funding gap in the initial years, allowing member states to implement social leasing programs before the full impact of carbon pricing on road fuel is felt in 2027.
However, the initial funding in 2026 is capped at €4 billion, potentially creating a shortfall. To mitigate this, experts recommend allowing member states to borrow against future revenues, ensuring sufficient resources are available to kickstart these vital programs.
Addressing Transport Vulnerability
A notable portion of the European population, approximately 20 million low- and medium-income individuals in the five largest EU countries, rely on combustion engine cars, notably in rural areas. This dependence makes them vulnerable to rising fuel costs, creating a "transport vulnerability" that social leasing aims to alleviate.
Social leasing is not a standalone solution but part of a broader strategy to promote sustainable mobility.Other initiatives, such as vehicle sharing, improved public transportation, and expanded active mobility options, are also crucial in addressing transport vulnerability.
Tailoring Programs to Local Needs
Effective social leasing schemes should be designed at the national level, taking into account local circumstances. Criteria such as car ownership, income level, and place of residence should be considered when determining eligibility. For example, a family in the bottom 40% of households in Germany living in a rural area could be eligible for social leasing.
Assuming a six-year lease period, social leasing could benefit between 1.5 million and 3 million households in the five countries studied, depending on the level of subsidies granted. This could reach up to 27% of low- and medium-income households in rural areas that are currently reliant on combustion cars.
Moreover, social leasing could create demand for electric vehicles among a new market segment, potentially accounting for 12% of the evs on the road in 2032. This could benefit European manufacturers if governments prioritize vehicles produced within Europe.
The EU's Role: Creating an Affordable EV Platform
The EU can play a crucial role in facilitating social leasing by helping member states secure the best possible deals from car companies. The EU Commission should establish an 'affordable EV platform' as part of the upcoming guidelines on social leasing. This platform would aggregate demand and supply information, facilitating negotiations with automakers.
Along with social leasing,governments should also support active mobility (bikes),public transport,car-sharing schemes,scrappage programs,and charging infrastructure installation.