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Coronavirus: France announces €8bn rescue plan for car industry

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The French government has announced an €8bn (£7.1bn) rescue plan for its car industry, which has been severely impacted by the coronavirus pandemic. President Emmanuel Macron’s proposal includes €1bn to provide grants of up to €7,000 to encourage citizens to purchase electric vehicles. It also puts money toward investments to make France a centre for electric vehicle output.

The plan comes as the industry braces for thousands of job cuts.In return for the relief, the two main French car producers Renault and PSA have promised to focus production in France.

“We need a motivational goal – make France Europe’s top producer of clean vehicles by bringing output to more than one million electric and hybrid cars per year over the next five years,” President Macron told reporters at a press conference at the Valeo car factory in Etaples, northern France on Tuesday.

He added that no car model currently produced in France should be manufactured in other countries.

President Macron – in his new post-virus spend-and-invest mode – wants to act now not just to rescue the industry from the immediate crisis, but also to prepare it for a future that will be both electric and he hopes much less dependent on foreign and in particular Chinese suppliers.

To boost demand now, the grants for households or companies that buy new electric cars are increased, as is the so-called conversion bonus for trading in a polluting car for a cleaner one.

The number of battery charge-points will be tripled to 100,000 by the end of next year.

A billion euros in investment will be directed into research and modernising production, and there’ll be a €5bn loan for Renault – part of the return for which is a promise by Renault to join a Franco-German consortium to develop car batteries. The aim, Mr Macron said, is to have one million electric cars being made in France every year by 2025.

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