Categories: Environment

Electric cars: still too dependent on subsidies?

A recent study conducted by Deloitte indicates that electric cars have not gained much more interest from potential buyers compared to last year, leading to concerns about a market slowdown.

As you may be aware, the criteria for the ecological bonus have significantly changed in France in 2024. In simple terms, any electric car manufactured outside of Europe no longer qualifies for the subsidy. As a result, popular models like the Tesla Model 3 (but not the Model Y, produced in Germany!), the Dacia Spring, and the MG4 are no longer eligible for the subsidy.

To address this issue, the affected manufacturers have adjusted their pricing strategies, with MG offering attractive commercial discounts on its MG4 and Dacia reducing the prices of its electric city car. However, despite the majority of electric cars remaining heavily subsidized, a recent Deloitte study casts doubt on the electric car market.

The French still prefer to buy traditional cars

Surprisingly, the interest of potential buyers in electric vehicles has not significantly increased compared to the previous year, raising concerns of a potential market slowdown. According to the data presented by Deloitte, only 9% of French respondents would consider purchasing an electric car as their next vehicle, compared to 7% in 2022. On the other hand, 41% of respondents would still opt for a gasoline or diesel car, while 19% express a preference for a hybrid car. This trend is not unique to France, as other markets such as Germany and the United States are also experiencing a decrease in electric car adoption. In Germany, changes in government incentives have impacted buyer confidence. Guillaume Crunelle, an analyst at Deloitte, comments: “We are on a plateau. We’re not being alarmist, but it’s soft.” This stagnation is worrying considering Europe’s objectives, as electric cars are often presented as an ecological solution, yet their adoption remains insufficient to create a significant impact at the moment.

Electric cars are still too expensive

One of the main obstacles to the adoption of electric cars is the price. A growing proportion of French customers surveyed do not want to spend more than 30,000 euros on their next vehicle. Additionally, concerns about limited battery life and the time needed to recharge vehicles persist. Despite the drop in prices for mid-range electric models, consumer expectations are high and seem to outstrip the advances of car manufacturers. The majority of potential buyers also seek a range of more than 400 kilometers, which requires larger and more expensive batteries—while the least expensive models today struggle to exceed 300 km of autonomy. The electric leasing option could help advance the electric car market in 2024, at least in France, but there are uncertainties about how the market will react when all its subsidies end.

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