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Two recent successes with “social leasing” programs for zero-emission vehicles
France’s social leasing initiative applied to both new and used cars and ran from January 2024 to mid-February 2024. In Washington State, the program was also for new and used cars and ran from August 2024 to October 2024. Both were based on income and number of individuals in the household. In France, beneficiaries had to be commuters using their personal vehicle, and the distance between their home and workplace had to be greater than 15 km or their driving related to work had to be more than 8,000 km per year.
The program in France sparked significant interest, with 90,000 applications submitted. In the end, 50,000 orders of battery electric vehicles (BEVs) were approved and funds were exhausted within 6 weeks of the program’s launch. Analysis of the first 25,000 beneficiaries based on data available as of June 2025 showed that 40% had an annual reference tax income per unit below €10,200 (Figure 1). Note, too, that two-thirds of these individuals fell into deciles one to four, which represent the lowest income groups among those eligible. Furthermore, the first half of the evaluated beneficiaries were notably younger, with an average age of 40, compared with new BEV buyers in France averaging 49 years old and all car buyers on average being 54 years old. Data show that in France, once individuals reach 40, their average standard of living—calculated by dividing household disposable income by the number of household members—begins to increase significantly and peaks in the 55–64 age group. A second edition of the social leasing program is set to be launched in September 2025 with modifications in terms of grant amount, budget, and how the scheme will be financed.
Figure 1. Demographics of the beneficiaries of the BEV leasing program in France, by income group (top) and age group (bottom)
Table 1. Details of the social leasing schemes in France and Washington State
| Topic | France “leasing électrique [electric leasing]” |
Washington State “low-cost leasing” |
|
| Grant amount | Leases for new and used vehicles Up to €13,000 (€6,000 BEV leasing aid plus €7,000 BEV purchase subsidy) Advanced by the lessor or its sales representative and then reimbursed by the government |
Leases for new and used vehicles Up to $16,500 (new) and up to $6,500 (used), both including state and federal rebate amounts Dealers required to seek reimbursement from the state after the lease is finalized |
|
| Vehicle | Models | New cars must meet a minimum environmental score based the carbon footprint of producing the vehicle and transporting it from the manufacturing site to its distribution site in France; list of qualifying vehicle models is here. Used cars must have been the subject of a first registration in France or abroad for at least 1 year but less than 3.5 years on the date of signing the lease. |
List of qualifying vehicle models |
| Weight | Up to 2,400 kg | Up to 10,000 lb (4,536 kg) | |
| Fuel type | BEVs, fuel cell electric vehicles | BEVs | |
| Price cap | €47,000 including 20% Value Added Tax | $90,000 (€83,000) manufacturer’s suggested retail price | |
| Leasing contract | Rates | €40–€150 per month, excluding mandatory insurance, services offered from the lessor, and charging fees | Under $100 (€92) per month (based on first results) |
| Duration | At least 36 months with the option of one extension (with or without purchase option) | Different grant amounts depending on leasing times for 24–35 months and 36+ months | |
| Beneficiaries | Target group | Private persons, at least 18 years old | Private persons |
| Residency | Resident of France | Resident of Washington State | |
| Income level |
Reference tax income per unit of less than €15,400 (this is 50% of tax households in France) For example, for a couple with a child, the maximum of yearly €15,400 per unit would be equivalent to an available income of €38,500 per year or €3,200 per month |
Maximum total household income defined by number of people in the household Household income of 300% or less of the federal poverty level (this is about 37% of the state population), amounting to about $45,180 annually for a single resident |
|
| Use case | Use a private vehicle and live more than 15 km from workplace or drive more than 8,000 km for work per year | Personal use | |
| Vehicle ownership option | Yes | No | |
| Terms for individual/residential address | Once per individual every 3 years | No more than three rebates are allowed per residential address | |
As targeted leasing programs for ZEVs get more attention in Europe, here are key themes for policymakers to consider when evaluating how best to design and finance such initiatives:
- Defining target groups. Besides income, commuting patterns, distance traveled, and private car ownership, other elements can define vulnerable groups that are more likely to experience transport poverty. First, a scheme could be extended beyond private individuals to additional groups like micro-businesses with 10 or fewer employees and associations that operate large vehicle fleets. Second, further criteria involving access, availability, and affordability, including whether there are alternative transportation options such as public transit and job opportunities within a certain travel distance, could be added. The urbanization rate could also be a relevant factor, as it relates to both the accessibility of various transport options and jobs. Clearly defining target groups may improve the approach to alleviating transport poverty for people who are dependent on cars by ensuring that those who face the greatest barriers receive tailored support such as adapted lease terms or support services. When such funds are allocated more effectively, this also fosters stronger political and public support.
- Setting criteria for qualifying vehicle models. To promote affordability and accessibility from a social perspective, eligibility could focus on the smaller segments and incorporate a price limit to maximize the effectiveness of government spending. In addition, environmental assessments could be made, and these could involve assessing the total greenhouse gas emissions throughout a vehicle’s life cycle based on the methodology the European Commission will publish later this year. Alongside the social aspect, this method could support climate goals and industrial policies.
- Funding options. At the national level, one option is a bonus-malus vehicle tax scheme that supports ZEV subsidies based on the principle that those who pollute should contribute. At the EU level, the Social Climate Fund is an option, and Member States can access the Recovery and Resilience Facility until the end of 2026.
As we’ve seen, targeted leasing can improve access to ZEVs for individuals who may not otherwise have the financial means to access them. It’s important to design these programs with care and consider not only national framework conditions, available funding sources, and the associated social benefits but also environmental and industrial goals.
