French President Emmanuel Macron has announced an €8bn plan to revive the country’s auto industry when exiting the COVID-19 pandemic. Increasing production and sales of electric vehicles is central to the plan.
Auto sales in France fell by about 90% in April compared to a year earlier. To rescue the country’s ailing auto industry, Macron said that he wants France to become the leading producer of clean cars in Europe. France will face fierce competition from Germany for that leadership role.
Macron announced that France would increase consumer incentives to buy an electric car to €7,000 from €6,000. The aid is also expected to include incentives for people to scrap their old vehicles and buy a lower-emission model.
Macron also tweeted that support for Peugeot-Citroen and Renault, as well as parts suppliers, will increase “massively.” Macron visited a Valeo plant in northern France, which makes parts for electric cars, to detail the full rescue plan. France’s auto industry employs about 400,000 people in the country.
To consolidate production in France, €1.5bn in grants and equity, will support modernization of production chains, Industry 4.0, robotization, digitization or ecological innovation. It includes €200m in subsidies from 2020 to support suppliers in their transformations and their move upmarket. The second part will be endowed with €600m in equity to encourage development and consolidations of industry players. The third component of €150m will support R&D and innovation to make France one of the most advanced countries in clean vehicle technologies, by continuing to work on batteries, on their recycling but also on hydrogen.
The €8 billion does not include a €5bn government loan guarantee under discussion for struggling Renault, or the millions the government has already spent on temporary unemployment payments to auto workers.
