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Presentation

The France Relance plan provides for an increase in the eco-bonus for the purchase or long-term lease of a clean vehicle, consisting mainly of a rise from 6,000 to 7,000 euros between 1 June 2020 and 30 June 2021 for electric vehicles, and by €2,000 for plug-in hybrid vehicles. The plan also provides for an increase in the conversion grant, notably by extending the range of eligible vehicles for trade-in to include Crit’air 3 vehicles.

The years 2015 to 2021 saw numerous reforms to the environmental penalty scheme, whilst the bonus scale remained much more stable.
This project aims to understand the causal impact on the car market of the subsidies for the purchase of clean vehicles introduced as part of the recovery plan.

Key Results

  • Studies of the impact of the penalty scheme in France show that sales react strongly to this measure, regardless of the model used. The model, which takes into account all margins (extensive and intensive), suggests that a €1,000 increase in the penalty leads to a fall in sales of a vehicle subject to it of around –11.
  • Assuming that the effects of the bonus and penalty are symmetrical, we find that the bonus-penalty scheme as a whole in 2019 resulted in a 2.7 per cent reduction in the average CO₂ emissions of new vehicles, and a 0.9 percentage point increase in the share of electric vehicles. These effects also increase from 2020 onwards and contribute to a 12 per cent reduction in the average CO₂ emissions of vehicles and a
    3.9-point increase in the share of electric vehicles.
  • It is also noted that this scheme does not appear to reduce the market share of vehicles assembled in France. The empirically documented decline in the share of domestic assembly in new vehicle sales does not therefore appear to be attributable to the introduction of support schemes for clean vehicles.

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Last modified: July 21, 2026