Social Leasing Programs Could Improve EV Affordability in Europe

Drivers in Europe could afford battery electric vehicles (BEVs) if they had access to social leasing programs, some experts say. Prohibitively high prices have placed electric cars out of reach for most drivers in major vehicle markets, limiting EVs to affluent consumers with disposable income and hindering the broader transition to electric mobility.

Although Europe is a world leader in electric vehicle adoption, there is still plenty of room for growth. Launching social leasing programs could allow Europeans who cannot afford EVs at current prices to access them without breaking the bank. This could accelerate electric vehicle adoption across the continent and help reduce Europe’s dependence on fossil fuels.

The automobile sector currently contributes to at least 29% of Europe’s greenhouse gas emissions. Cars are the most common mode of transport in dozens of European countries, and experts agree that vehicles will likely remain the dominant form of transport, even as access to clean, affordable, and active public transport improves.

To ensure transportation emissions decrease over time, Europe needs an equitable transition to electric vehicles. While the EU is giving other markets a run for their money in EV adoption, the transition has not been uniform. Countries like Norway and Sweden have recorded strong EV sales, while other regions risk falling behind.

This disparity is largely due to the high costs of purchasing a battery electric vehicle compared to an internal combustion engine car with similar mileage. A social leasing model that incorporates state support could lower EV costs for a broader range of consumers, giving less affluent Europeans access to electric cars while also opening up untapped markets for Europe’s auto industry.

For example, such a structure could allow drivers in France to lease an electric car for just $164 per month, while countries like Poland would need even lower monthly costs, around $27, to enable a fair and inclusive EV transition. Experts estimate the EU could sell one million small EVs each year for the next decade by pooling national demand for low-cost electric vehicles.

However, this will only be possible if EU-level efforts are coordinated and focused on promoting small, lightweight, affordable, and energy-efficient electric cars. Additionally, ensuring that these vehicles are manufactured within Europe could stimulate the region’s automotive industry and give it the resilience needed to compete with China’s massive EV sector.

Incorporating a social leasing scheme into the EU’s Social Climate Fund and implementing it between 2025 and 2035 could help up to 10 million European families to access electric vehicles—while strengthening the competitiveness of Europe’s auto industry in a crowded global market.

As programs like social leasing schemes get underway, the increasing uptake of electric vehicles could also spur manufacturers like SolarBank Corp. (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: GY2) to seek out beneficial business relationships with the automakers serving the leasing programs across the region.

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