Renault Zoes go cheap in Germany and France

European EV buyers can get a new EV cheaper than a mobile phone contract, and even free in some cases.

That’s because of new purchase subsidies provided by national governments in both countries BloombergNEF reports.

It says shoppers have swarmed virtual showrooms in Germany and France after EV incentives were boosted to stimulate demand, making EV prices among the most favourable globally.

It means dealership chains like Autohaus Koenig can advertise a lease for the Renault Zoe entirely covered by subsidies. About 3000 enquiries have been lodged and some 300 people have signed contracts.

Germany’s chancellor Angela Merkel and France’s president Emmanuel Macron aimed to soften the COVID-19 pandemic’s blow to the badly hit car sector, especially with European sales recovering more slowly in Europe.

In France, Renault Zoe sales could double this year while demand for internal combustion engine (ICE) vehicles is dropping.

In the Netherlands, a 10 million-euro fund to support EV purchases was used up in eight days.

“There are a lot of attractive offers right now because of higher subsidies, and that’s boosting demand,” BloombergNEF analyst Aleksandra O’Donovan says.

“The EU is pushing toward decarbonising transport, and the coronavirus crisis has allowed them to accelerate that.”

Germany’s subsidies of as much as 9000 euros an EV have boosted sales nearly 10 times for Carfellows, a German auto-trading website.

It started offering leases of the Mercedes-Benz EQC for 9.90 euros a month.

Governments will have to weigh carefully when to let those subsidies run out to avoid sales falling off a cliff, O’Donovan says.

“The decreasing price of batteries suggests that EVs should be cheaper to buy than gasoline cars from the mid-2020s,” she adds.

“Once that happens, the market will accelerate even without subsidies.”