French Government Amps Up Support for EVs, Hybrids

PARIS – Renault and PSA Peugeot Citroen applaud the new French government’s plan to boost consumer incentives for electric vehicles and hybrids with low emissions.

Minister of Productive Recovery Arnaud Montebourg says that through the end of the year, the maximum bonus for buying a pure EV is increased from €5,000 to €7,000 ($6,100-$8,500) and the bonus for hybrids doubles to €4,000 ($4,900).

The bonuses will be funded in part by higher penalties for purchases of gas guzzlers taking effect in 2013 and expected to continue at least through year’s end.

Renault offers three pure EVs – the Twizy scooter, Fluence ZE family car and Kangoo ZE van – and soon will add the small Zoe. PSA has five 4-wheel-drive hybrid models, plus the Peugeot Ion and Citroen C-Zero EVs it buys from Mitsubishi, and an electric van coming next year.

“Renault welcomes the strong signal in favor of clean vehicles, including electric vehicles," CEO Carlos Ghosn says. PSA CEO Philippe Varin says the bonuses encourage innovation and research in France.

Montebourg says France will provide €120 million ($148 million) in state support to small and medium businesses in the auto industry that create or retain jobs, €50 million ($61 million) for shared activities in the industry and €5 million (€6 million) to buy EVs. The national government is committed to buying EVs or hybrids for at least 25% of its fleet.

Additional French support for the auto industry includes earmarking €350 million ($430 million) for research into advancing automotive technology, plus extension of a tax deduction for research conducted in France.

Suppliers are invited to borrow from a €450 million ($553 million) fund, and an existing “Fund for the Modernization of Automobile Suppliers” will invest €260 million ($320 million) in projects already under way.

Montebourg will ask the French National Assembly to monitor sales of imported South Korean vehicles built by Hyundai and Kia. Those auto makers have increased their share of the European market since the European Union signed a free-trade agreement, while PSA and Renault lost share in South Korea in the same period.

He also says filmmakers Cedric Klapisch and Luc Besson will produce advertisements for French cars "to showcase the know-how of ‘Made in France.’"