France’s Car ‘Malus’ Revenue Set to Break €1 Billion as CO₂ Threshold Tightens

Malus Hits Majority of New Cars, Revenue Forecast Surges

In the first half of 2026, 51% of new passenger cars sold in France attracted an ecological malus, up from 48.3% a year earlier, according to the latest monthly barometer from industry body Mobilians and data provider Dataneo. That’s 437,372 vehicles, with the average malus on affected cars rising 20% to €1,197. Spread across all new car sales, the average levy now stands at €611 per vehicle, a 27% jump from H1 2025.

The result: combined CO₂ and weight malus receipts reached €523.4 million in the first six months, climbing from €405.1 million. For the full year, the government is on track to collect over €1 billion for the first time – an estimated €1,008.2 million – after taking in €867.6 million in 2025.

The sharp increase is driven by the tightening of the CO₂ threshold. In 2025, the malus kicked in at 113 g/km, with a maximum penalty of €70,000; this year it starts at 108 g/km and the cap rises to €80,000. The threshold is scheduled to fall further to 103 g/km in 2027, with a €90,000 ceiling.

Luxury and large-vehicle brands contribute disproportionately. Mercedes-Benz tops the ranking, contributing €66.5 million (12.7% of total receipts), followed by BMW (€56.7 million), Volkswagen (€45.4 million), Audi (€44.7 million), Peugeot (€37.6 million), Citroën (€28 million), Renault (€27.3 million), Dacia (€17.6 million), Mini (€17.1 million) and Porsche (€14.6 million). By model, the Mercedes GLC led with 1,733 units attracting €17.31 million in malus, followed by the Peugeot 5008, Mercedes GLA, BMW X3 and Volkswagen Tiguan.

In July, fully electric cars accounted for 35% of new registrations (44,378 units), while hybrids made up 48%. Year-to-date, electric vehicles hold 29% of the market. The social leasing scheme for low-income households, launched on 16 July, is expected to further boost EV adoption. Total new car registrations rose 9% in July year-on-year to 126,808, though volumes remain well below pre-pandemic levels.

Why Mercedes Leads the Levy and What 2027 Means for the Market

How the 2027 Threshold Will Redraw the Market

The scheduled drop in the malus trigger to 103 g/km in 2027, combined with a €90,000 cap, will pull many mainstream family cars into penalty territory. Even today, models like the Peugeot 5008 – a non-luxury MPV – generate significant malus receipts. As the net tightens, buyers who would have previously avoided the levy may face charges of several hundred or even thousands of euros, effectively re-pricing entire segments. This dynamic is already pushing consumers toward electrified alternatives; the 35% EV share recorded in July, while partly driven by the social leasing launch, reflects a structural shift that the malus is accelerating.

Why Mercedes and BMW Shoulder the Heaviest Burden

The brand rankings underline how malus exposure is concentrated among premium manufacturers. Mercedes-Benz and BMW together account for nearly a quarter of total receipts, a direct consequence of their model mix weighted toward heavy, powerful SUVs like the GLC and X3. Yet even volume brands like Volkswagen and Renault are heavily impacted, showing that the tightening CO₂ rules reach well beyond luxury. This suggests that few legacy combustion-engine portfolios are immune and that the penalty is becoming a built-in cost of doing business in France for many automakers.

The Re-Pricing of the New Car Market and the EV Boost

With the average malus per vehicle on affected cars up 20% year-on-year, the tax is no longer a marginal nuisance – it is a significant component of the purchase price. For a buyer considering a mid-size SUV or crossover, the malus can add €1,000–€14,000 to the bill, dramatically improving the total cost of ownership for equivalent electric models. Simultaneously, the social leasing scheme specifically targets lower-income households, broadening EV access. The interplay of penalty and subsidy is reshaping demand: as malus receipts head toward €1 billion, part of that sum may effectively fund the purchase aids that spur EV uptake, creating a self-reinforcing policy loop.

What the Billion-Euro Malus Means for Your Next Car Purchase

• Check the malus that will apply to your intended model today – and in 2027. The threshold drops to 103 g/km next year, so a car that escapes the penalty now may not later. Use official CO₂ figures for the exact configuration.
• Factor the malus into total purchase cost, not just the list price. Even a €1,200 average penalty can flip the financial case in favour of an electric or plug-in hybrid alternative, especially when combined with government purchase incentives.
• Look closely at the models topping the malus list. Vehicles like the Mercedes GLC, Peugeot 5008 and BMW X3 attract large levies; manufacturers may respond with discounting or more efficient trim options to mitigate the impact, offering negotiation opportunities.
• If you qualify as a low-income household, explore the social leasing programme. Launched on 16 July, it specifically targets the groups that would be hardest hit by the rising cost of combustion vehicles, providing a subsidised route into an electric car.