New regulations start to impact new-car market in France

04 March 2025

French registrations declined again in February. But how will the market adjust to new regulations that could disrupt the majority of powertrains? Autovista24 special content editor Phil Curry examines the market.

The French new-car market continued its poor start to the year in February. Changes to regulations could cause more problems in the coming months.

Registrations of new passenger cars dropped by 0.7% last month, according to data from the PFA. A total of 141,568 models were delivered to customers, a difference of 1,030 units year-on-year, according to Autovista24 calculations.

This is the ninth time in 10 months that the French market has endured a loss. Only December 2024’s 1.5% improvement stands out in that period. There may be more hardship to come, with battery-electric vehicle (BEV) incentives cut, and the CO₂ emission penalty rising.

Market regulations

February 2024 saw the beginning of the country’s social leasing offer, which helped boost figures in that month. This means February 2025 was up against a tougher reporting period.

There was also one less working day in the month compared to the previous year. Yet regulation changes also played their part and could continue to disrupt the market.

After 14 February, registered BEVs were not eligible for the previous incentives if they were ordered before 2 December 2024. The maximum amount offered against the purchase of a new BEV dropped from €7,000 to €4,000 for households whose tax income does not exceed €16,300.

For households with a taxable income between €16,300 and €26,200, the aid is now €3,000. Above this threshold, the subsidy was reduced to €2,000. Originally, households with an income above €15,400 were eligible for €4,000 of aid.

These changes may put buyers off the purchase of a new BEV. Some models will appear expensive compared to their petrol or diesel counterparts.

Additionally, from 1 March, the CO₂ emission threshold for triggering a €50 malus tax will tighten to 113g/km. A further €25 will be added for each 1g/km up to €150 or 117g/km. A further €20 for each gramme per kilometre will be added up to 124g/km. After this, the increments increase to a maximum €70,000 penalty for vehicles with CO₂ emissions of more than 192g/km.

This tax is only applicable on the date of registration but could put buyers off more polluting vehicles. This may impact internal-combustion engine (ICE) registrations. With lower incentives and higher taxes, consumers and businesses may, therefore, be funnelled into the hybrid market.

Market reacts to regulations

‘We clearly saw two sequences over the month, a wave of electric car registrations up until 14 February, which then fell back the following day,’ commented Marie-Laure Nivot, Head of automotive market analysis at AAA Data. 

‘Demand, therefore, remains largely guided by purchase aids. The changes in bonuses and penalties make the market difficult to understand, because these early registrations risk weighing on the dynamics of March. Meanwhile, the share of electric engines must continue to increase in order to achieve the objectives of reducing CO₂ emissions,’ stated Nivot.

Alongside the subsidy reduction and CO₂ penalty increase, there is also a tax based on the weight of the vehicle. This may impact plug-in hybrid (PHEV) registrations as these models tend to be heavier. Therefore, drivers could end up paying higher penalties at the time of registration. The increase may drive buyers towards lighter hybrid models. However, BEVs are exempt until 2026.

BEV registrations down again

The French BEV market dropped 2.1% in February. The technology recorded 25,335 registrations, a difference of 538 units year-on-year. This meant the powertrain’s market share fell slightly. It represented 17.9% of total deliveries last month, down from an 18.1% hold in February 2024.

With the social leasing programme beginning in February 2024, the all-electric technology was compared with a strong period this year. Together with the changes in regulations, it was always likely to suffer.

However, there was a spike in registrations of the powertrain up until the incentive changes on 14 February. According to AAA Data, registrations were up by 59%, with a market share of 25% until this time.

AAA Data reports that the electrification of the fleet market is progressing significantly. The sector’s demand for BEVs jumped by 41%, with a market share of 20%. Yet the private sector, which accounts for 51% of deliveries, was down by 29% year on year. This is likely due to the launch of social leasing, which only applied to individuals in February 2024.

Across the first two months of 2025, BEV registrations were down by 1.4%, a difference of 632 units. A total of 45,258 registrations left the technology with a market share of 17.7%, up by 0.4 percentage points (pp).

Hybrids hold up the market

The French market has been dependent on hybrids preventing further overall declines for several months. There have only been occasional increases in BEV or PHEV powertrains across the last 12 months. Yet full hybrid (HEV) and mild-hybrid (MHEV) figures have seen consistent improvements.

This trend continued into February 2025. HEVs and MHEVs were the only major powertrains to record growth. With changes to regulations, this is a trend that is likely to continue.

MHEVs, were the best-performing technology in terms of growth last month. Their tally of 31,573 deliveries was an 81.3% surge year on year, a difference of 14,163 units.

This meant their market share jumped 10.1pp, to 22.3%, making it the second-most popular powertrain in February. MHEVs sat just 2.5pp behind petrol, compared to a 21.5pp gap from 12 months ago.

Meanwhile, HEV deliveries were up by 28.4% in February, according to Autovista24 calculations. A total of 30,571 units were registered, 6,754 more than the same period in 2024. This left the powertrain with a market share of 21.6%, up 4.9pp.

Across the first two months of 2025, HEVs saw registrations rise 28.5%, with 57,671 deliveries, an improvement of 12,791 units. Their market share hit 22.5%, up from the 16.9% recorded in the same period of 2024.

MHEVs were up 85.4%, with 55,920 registrations. This is an increase of 25,763 units and a 10.4pp climb in market share to 21.8%.

PHEVs plummet

PHEVs struggled again in February and were the month’s worst-performing powertrain. The technology was down 45% in the month, with just 6,451 registrations. This was a drop of 5,281 units compared to February 2024, based on Autovista24 calculations.

‘With no more benefits for companies to purchase a PHEV, numbers have struggled this year,' commented Ludovic Percier, senior residual value analyst at Autovista Group.

‘The bonus for PHEVs, including a tax deduction for businesses, is no longer in place. In addition, new models with increased ranges are coming to the market, with higher prices. Companies are instead looking at the hybrid market, which is pushing registrations in that sector upwards.

‘In addition, with more HEVs on offer from carmakers, this is increasing the choice for both individual and company buyers around this powertrain,’ Percier concluded.

The policy changes have clearly had an impact on the PHEV market. The powertrain’s market share in February dropped to 4.6%, the lowest of the major technologies. In the same period last year, PHEVs held an 8.2% share.

Combining the figures for January and February, PHEVs had clearly faltered. With 11,303 deliveries, the market was down 49.3%, equating to 10,978 fewer vehicles. From an 8.4% market share in the first two months of 2024, the powertrain held just 4.4% of the market.

Plug-in problems

The PHEV struggle has impacted registrations of electric vehicles (EVs) in France. Despite the small decline in BEV deliveries in February, the plug-in market was down 15.5%. Its 22.5% market share was down by 3.9pp compared to a year ago.

In the year to date, EVs were down 17% in France, with a market share of 22.1%, down from 25.7%.

Adding HEVs into the figures, the electrified sector was up by just 1.5% in February. This was despite the strong performance of the hybrid powertrain in the month. This growth means that from an EV deficit of 5,819 units, the electrified market improved by 935 deliveries. The sector took a 44% market share, up by 0.9pp year on year.

In the first two months of 2025, electrified registrations were up 1%, with growth of 1,181 units. This reflected a 44.6% market share, improving by 1.9pp.

ICE slides further

Petrol registrations in France have been in decline for a full year. The last improvement in the powertrain’s figures was February 2024. With carmakers increasing their MHEV and HEV offerings, rather than focusing on full petrol models, this slide will continue.

Last month, there were 35,110 petrol registrations, a drop of 27% year on year. This decline means the fuel type fell from a 33.7% share in February 2024, to 24.8% last month. Across the first two months of the year, petrol was down by 27.5% with 65,084 deliveries. The fuel type’s market share slid by 8.5pp, to 25.4%.

As carmakers continue to reduce the number of diesel models in their line-ups, the technology continues to struggle. However, diesel marginally outperformed PHEV registrations in February. A total of 6,707 units were delivered to customers, a drop of 34.4%. Diesel ended February with a market share of 4.7%, down from 7.2% recorded 12 months prior.

In the year to date, diesel deliveries were down 41.2% to 11,663 registrations. The fuel type’s market share of 4.6% was down from 7.5% recorded in the same period of 2024.

Combined, ICE registrations were down 28.3% in the month, with a market share of just 29.5%. This was significantly lower than its 40.9% share from one year ago. Across January and February, the technology declined 30%, taking a 30% market share.