Researchers call for EV lease subsidy for low-income households
Low-income earners benefit more from an EV lease subsidy than from an excise tax reduction. How does it work, and how much does it cost?
Published on August 8, 2026
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The Netherlands spends €1.7 billion annually on fuel tax cuts. Yet only 7% of that amount goes to the lowest-income group. Researchers and the government see a better solution: a targeted lease subsidy for electric cars. This measure would help 160,000 low-income households.
Excise tax reduction: limited impact
The reduction in fuel excise taxes, implemented in 2022 following Russia’s invasion of Ukraine, costs the government €1.7 billion annually. However, most of this money does not reach the group that needs it most. Research shows that only 7% of the revenue goes to the lowest-income group, even though this group makes up 50% of the population🔗︎.
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Lease subsidy: a targeted solution
A lease subsidy for electric cars offers a more targeted approach. Households with an income of up to 130% of the statutory social minimum (WSM) and an annual mileage of more than 8,000 km are eligible. For approximately €1.1 billion—significantly less than the annual cost of the excise tax reduction—160,000 households can obtain an electric lease car with a subsidy of €7,000 per vehicle🔗︎.
Lessons from France
France was a pioneer with the “leasing social,” a program introduced in 2024. Initially, the subsidy was €13,000 per vehicle, which reduced monthly leasing costs for households to €54–€89. The program was so popular that more than 90,000 applications poured in within six weeks, even though the budget was only for 20,000–25,000 vehicles. Due to budget overruns and problems verifying income eligibility, the program was temporarily suspended. In September 2025, a revised version was launched with a lower subsidy of €7,000 per vehicle and higher monthly costs (€140–€200)🔗︎.
Lessons for the Netherlands: An excessively high subsidy can lead to unmanageable costs. A phased rollout with a smaller budget in the initial phase can mitigate risks.
Challenges in the Netherlands
In the Netherlands, an estimated 160,000 households meet the criteria for the lease subsidy. This group is characterized by an income of up to 130% of the WSM and a high dependence on cars, particularly in peripheral regions such as the Northeast of the Netherlands, Zeeuws-Vlaanderen, and South Limburg. Approximately 75% of these households live in a townhouse or multi-family home, often in housing provided by a housing association, which limits the availability of charging infrastructure🔗︎.
Challenges include the need for collaboration between municipalities, housing cooperatives, and grid operators to establish sufficient charging infrastructure. In addition, abuse must be prevented by setting conditions, such as a statement from the employer and a minimum commute distance🔗︎.
Economic and social impact
The lease subsidy is not only more efficient but also fairer than a general reduction in excise taxes. Low-income households spend a larger share of their income on fuel and are more vulnerable to price increases. An electric car structurally reduces their energy costs: with a monthly lease payment of €100–€140 (including maintenance), they save an average of €91 per month compared to a gasoline-powered car🔗︎. Furthermore, it reduces dependence on fossil fuels, which increases resilience to future energy shocks. The measure also contributes to climate goals: the expected CO₂ reduction is 0.5 megatons by 2030🔗︎. For the government, the costs are manageable: €1.1 billion for 160,000 households, compared to €1.7 billion for the current excise tax reduction.
Looking ahead: what’s next?
The cabinet is currently investigating the feasibility of a lease subsidy for low-income households, inspired by the French model. State Secretary Annet Bertram (CDA) of Infrastructure and Water Management has stated that the scheme could specifically protect low-income households against high fuel prices🔗︎. In addition to the lease subsidy, a trade-in program for fossil-fuel vehicles is also being considered, set to launch at the end of 2026 with a budget of €52 million🔗︎. In the coming months, the exact conditions—such as the income threshold and the minimum travel distance—will be further developed. If the program is implemented, the Netherlands could take a significant step toward combating transportation poverty—in a way that is both socially and economically responsible.