The S&D's plan for a European social leasing revolution for electric cars

Cars have long been a cornerstone of Europe’s economic strength.

However, today the continent’s automotive industry is under pressure, as trade disruptions, rising energy costs, raw material shortages, and shrinking demand for European cars converge.

Most concerning is the rapid rise of non-European competitors, steadily gaining ground in global markets. To protect Europe’s industrial backbone, we must make electric mobility accessible to all Europeans by boosting demand through a bold commitment to social leasing.

Some in the European automotive industry still pin their hopes on ever-more efficient combustion engines to secure their future.

Yet, history shows the danger of such a path of dependency: Nokia once dominated the mobile phone market but failed to respond to the iPhone revolution. Faster, more efficient keyboard phones were no match for touchscreens and apps.

We must ensure that our car manufacturers don’t fall into the same trap.

Europe, therefore, stands at a crossroads. The race is on to put green, European-made, and affordable electric vehicles (EVs) on our roads—– before Chinese EVs seize the market entirely.

The European Commission recognises this urgency.

In her State of the Union address, EU Commission president Ursula von der Leyen announced a forthcoming ‘small affordable cars initiative’, creating a new ‘e-car’ category aimed at affordable, lightweight and clean vehicles. It is a clear sign of the times. 

This shift in focus is highly welcome.

Today, it is bankers, consultants, and lawyers — those who can already afford electric vehicles — who benefit most from tax breaks and subsidies.

For many other Europeans, however, an EV still remains out of reach — especially for working people who would benefit the most from affordable clean mobility: farmers, social care workers, and factory workers — those who depend on cars to do their jobs, often working irregular hours, in areas poorly served by public transport, or when multiple daily trips are unavoidable.

The race is on to put green, European-made, and affordable electric vehicles (EVs) on our roads—– before Chinese EVs seize the market entirely

That’s why the Socialists and Democrats (S&D) Group in the European Parliament is pushing for a European Social Leasing Plan — so that clean mobility is not a privilege for the few, but a right for all. 

Our European social leasing plan

The concept is straightforward: make EVs affordable for low- and middle-income households through a modest monthly leasing fee.

A points-based system taking into account income, family size, place of residence, and commuting needs would guarantee fairness. Priority would go to those with the fewest alternatives: rural residents, shift workers, and families struggling on lower incomes.

To qualify, EVs would need to meet the highest social and environmental standards, alongside strict data storage rules.

In practice, this means only EU-made vehicles would be eligible. In doing so, Europe not only supports its citizens, but also strengthens its industry and support its workers.

Member states don’t need to wait for permission to start.

In their social climate plans, they are already required to submit a list of measures to target transport-poverty directly. One obvious solution lies in social leasing; a measure the commission itself encourages governments to adopt.

Yet, we need action on a European scale.

Europe has proven before — most strikingly with the joint purchase of Covid vaccines — that it can wield real power when it acts together. By pooling their efforts, member states could once again mandate the commission to negotiate a European deal with manufacturers and leasing companies, tailored to each country’s needs but backed by the strength of collective demand.

Three birds with one stone

A recent study by the Oeko-Institute shows that from 2026 to 2032, social leasing could support up to three million households in just a few member states. Scaled across the EU over a decade, that figure could surpass ten million households. 

The benefits are threefold.

First, our automotive industry becomes more competitive through a reliable market for small EVs, which in turn spurs domestic battery production. Today, China dominates the battery value chain, while Europe urgently needs its own capacity. 

Second, Europe takes a decisive step towards its climate goals by further boosting the supply and uptake of electric vehicles.

Thirdly, citizens gain access to affordable mobility options. While public transport remains vital for lifting millions of Europeans out of transport poverty, the social leasing of EVs can expand access to work, education, and leisure for households and regions where cars are indispensable.

All of this has a knock-on effect on the second-hand car market.

Today, used EVs remain prohibitively expensive, slowing wider adoption. By expanding access now, we can accelerate the necessary growth of a healthy, affordable second-hand car market, bringing electric mobility within reach of even more Europeans.

A European promise

Clinging to combustion engines offers nothing but false hope and risks blocking the development of new and innovative players. By contrast, a European Social Leasing Plan could be the catalyst for the growth of our industries of tomorrow. 

Imagine every town and neighbourhood where the cars driven daily by farmers, factory workers, and nurses are electric.

Consider that this will lead everyone to breathe cleaner air, while these quieter cars create a calmer atmosphere: quieter streets, more room for the sounds of nature, or an undisturbed chat in a café by the street, becoming the new soundtrack of the European way of life.

All this thanks to greener cars, made in European factories that provide quality jobs. This would serve as a visible sign that Europe stands with its citizens, honours its climate commitments, and invests in its industrial future.

Social leasing delivers on all three.

By creating additional and stable demand for affordable EVs, Europe can fight transport poverty, advance its climate commitments, and ensure that the next generation of cars is proudly built in Europe.