The French Government will reduce the purchase tax incentives for lower carbon cars and increase the penalties for high-pollution vehicles beginning in January.
France’s bonus-malus scheme provides financial rewards for those who purchase or lease a new vehicle emitting less CO2 g/km while taxing more heavily polluting cars. The incentive is paid to any French resident at first registration for the purchase or lease (with the option to buy or lease for a minimum of 2 years) a new vehicle if its CO2 emissions do not exceed 105 grams of CO2/km by 2012 (formerly 125 grams of CO2/km in 2010, 110 grams of CO2/km in 2011).
The incentives from 2012 will range from €300–5,000 (US$400–6,671) with all but the highest range (> or = 50 g/km CO2) being reduced and with applications required to be submitted within 6 months of purchase. The Government will maintain the 2011 allocation of €2,000 (US2,668) for hybrid and electric vehicles emitting less 110 grams of CO2/km or less.
Those purchasing models emitting between 191 and 230 g/km must pay a penalty of €2,300 (€1,600 previously) (US$3,069 and US$2,135, respectively) while vehicles above 231 g/CO2 will attract a €3,600 (US$4,002) penalty, €1,000 (US$1,334) more than before. In addition, the annual penalty will be raised from 190g to 245g.
France’s Prime Minister Francois Fillon had said in August that the scheme would be adjusted to ensure “a balanced budget” in 2012, as the Government claims the program lost €1.2 billion (US$1.6 billion) between 2008-2010.