France faces fiscal challenges amid electric vehicle transition

The transition to electric vehicles is creating a significant fiscal gap for the French state. According to a report by the Institut mobilités et transitions, the loss of revenue from petroleum product duties could reach 2.5 billion euros by 2030 and climb to 22 billion euros by 2035 if no action is taken. To address this, the institute has proposed a digitalized annual vehicle tax, with projected average costs of 140 euros by 2030, to compensate for the decline in fuel-based tax revenues.

Simultaneously, the economic viability of used electric vehicles is shifting. Calculations by the Institut de l’économie pour le climat indicate that for a typical household driving 16,000 kilometers annually, switching from an older gasoline car to a used electric model is projected to become profitable by 2026. While the previous year showed a monthly deficit of approximately 60 euros, the 2026 model suggests a monthly saving of about 10 euros, driven largely by projected gasoline prices reaching 2 euros per liter.