Two “social leasing” programs for zero-emission vehicles  that actually work

Targeted leasing programs for zero-emission vehicles (ZEVs), commonly known as “social leasing,” are increasingly part of debates about how to make clean transportation more accessible and equitable.

The idea is that by considering social elements such as income level and commuting distance, government support can help lower monthly leasing fees and make ZEVs more accessible for those who may not otherwise be able to afford them.

Here I’ll highlight two social leasing programs—one in France and the other Washington State in the United States—and then explore what else policymakers can consider when designing such programs.

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)

The Industrial Action Plan for the European automotive industry suggests implementing national “Social Leasing Schemes” that apply to new and used ZEVs and targeting vulnerable groups like those with lower incomes.

The European Union (EU) defines vulnerable groups across various legal, policy, and operational frameworks; in the context of social protection, it includes those at risk of poverty based on factors like ethnicity.

The Action Plan also suggests incorporating Social Leasing Schemes as part of the implementation of the national Social Climate Plans under the Social Climate Fund, which was established to tackle the potentially negative social effects of the upcoming EU Emissions Trading System 2 (ETS2), and it lists support measures for vulnerable groups such as the purchase of ZEVs.

To get funding from the Social Climate Fund, Member States are required to draft national Social Climate Plans (due by June 30, 2025) that detail the measures and investments aimed at supporting vulnerable groups.  

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.

Sandra Wappelhorst is research lead for the International Council for Clean Transportation.