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The French example shows there is significant public demand for electric vehicles when economic conditions are met.
The UK’s electric vehicle transition is well on track, with electric vehicles (EVs) making up almost a quarter of new car sales in 2025, and recent AutoTrader data showing that, for the first time, new electric cars are on average cheaper to purchase than the petrol models.
Despite this, lower-income households still face significant financial obstacles to replacing petrol and diesel vehicles with EVs. The cheapest available lease for an EV remains above what lower-income households typically spend. Currently, the bottom 40 per cent of earners spend under £100 a month on motoring purchases or leases, while the cheapest EV lease is £141, creating an affordability gap.
This entrenches social inequalities, as higher-income households can benefit from the lower running costs of an EV, while lower-income households often end up driving older petrol or diesel vehicles, which cost more to run and are more polluting.
The recent oil‑price crisis has deepened this inequality. EV drivers are around five times less likely than petrol or diesel drivers to be impacted by fuel‑price spikes. Meanwhile, 58 per cent of the UK’s oil imports are used in transport – leaving the country dangerously vulnerable to price shocks. This highlights the role of EVs not just as a climate measure, but as a tool to reduce household vulnerability to volatile fossil‑fuel markets.
An alternative is possible. In 2023, France began to address this inequality head‑on by introducing social leasing. The programme offers lower‑income households access to EVs from €49 to €150 per month. Within six weeks of launch, the scheme received applications for more than triple the number of available places, a strong signal that demand for affordable EVs exists once the necessary economic conditions are met.
Now, with the war in Iran drawing further attention to the cost benefits of EVs, the French government has doubled down on electrification. It announced a range of new measures to reduce France’s dependence on volatile oil and gas, including funding another 100,000 social leases for lower-income households and high-mileage drivers.
The UK should follow France’s lead. Transport & Environment UK’s analysis suggests that for the same cost as continuing to freeze fuel duty for another year, the government could fund social leasing for up to 230,000 households, bringing monthly lease costs down to as low as £77. This could be sustainably funded by a modest tax on large luxury SUVs, which fairly reflects the impact larger vehicles have on our roads and communities. It would also help to support British EV manufacturing, as vehicle eligibility for the scheme could be based on criteria that prioritise made-in-UK or EU models.
The UK could not only learn from France, but also go even further. First, subsidy levels could be adjusted to prioritise value for money and allow even more households to benefit. The overwhelming demand for the first cohort of the French scheme, where subsidy levels reached as high as €150 a month, suggests demand would remain strong even at lower subsidy levels.
A £100 monthly subsidy would bring EV leases within the typical expenditure of middle- to lower-income households, before even accounting for the savings from significantly lower running costs. For a typical social care worker, this could provide savings of over £1000 on lease costs alone over a vehicle term.
Second, the UK could subsidise bundled leases that include charging, maintenance and insurance costs to clearly signal the cost benefits of EVs to lower-income households and combat misinformation.
Third, offering scrappage bonuses for old, polluting cars as a discount on EV leases could help tackle air pollution while making EVs more affordable.
The EV transition is succeeding in the UK, but intervention is needed to ensure that everyone has access to the benefits. France’s success with social leasing has shown just how popular EVs are once the economics work. The UK must follow in its footsteps – to cut bills for lower-income households, increase our energy independence in uncertain times, and fight the climate crisis.
Eloise Sacares is a senior vehicles policy researcher at Transport & Environment UK
