Macron Unveils 8 Bn-euro French Auto Rescue, Champions Electric Cars

President Emmanuel Macron on Tuesday announced an 8-billion euro ($8.8 billion) plan to revive France's auto industry by making it the European leader in electric cars, boosting a sector brought to its knees by the coronavirus.

Macron said the package would include one billion euros in subsidies to encourage purchases of electric and hybrid cars and set a target of France producing a million green cars annually by 2025.

The "historic" intervention will aim to turn France's rechargeable car industry into Europe's biggest, the president said.

Visiting a car factory in Etaples in northern France, Macron said his government would seek to boost flagging customer demand with a subsidy of 7,000 euros for each individual buying an electric car, 5,000 for each company purchase, and 2,000 per hybrid rechargeable car.

Starting June 1, there would also be an aid of 3,000 euros for converting from a petrol-fuelled car to a less-polluting one -- and as much as 5,000 euros to upgrade to an electric vehicle, the president said.

He said that some three quarters of French people would be eligible for the incentives.

"In total, the state will provide a bit more than 8 billion euros in aid to the sector," said Macron.

France, the home of Renault, Citroen and Peugeot, has seen car sales and revenue slashed by some 80 percent as a result of a two-month nationwide lockdown to curb the spread of the coronavirus, said Macron.

By the end of June, some half a million cars will have gone unsold.

"This has never been seen by this sector which represents close to 16 percent of the revenue of our industrial sector," said the president.

The car industry in France is critical to the French economy -- comprising some 4,000 businesses, 400,000 direct employees and 900,000 in total.

The president said the plan was aimed at "defending our industrial employment, which is going to be faced with one of the most serious crises in its history" and also protecting France's "industrial automobile sovereignty".

"And it is also a plan for the future of the automobile in the 21st century," he added.

The plan won a warm welcome from the head of the sector association Plateforme Automobile, Luc Chatel.

"This sets out a new ambition for the auto industry in France and responds to the gravity of the situation", he told France Info radio.

"Excluding periods of war, we are going through the most serious crisis in the history of the auto sector," he added.

Chatel applauded the plan for one million electric or hybrid cars annually by 2025 as "realistic".

The French government is eager to use the crisis to push industry in a greener direction and has made a seven billion euro aid package for Air France conditional on a more environmentally-friendly strategy from the airline.

Macron also announced that embattled Renault has agreed to join a Franco-German project to produce electric batteries for the rechargeable auto industry.

Finance Minister Bruno Le Maire has said Renault would need to join the project, which already includes competitor PSA, in order to receive a five billion-euro government rescue loan.

Macron also linked the rescue deal for Renault to ensuring guarantees for the future of its staff at the plants in Maubeuge and Douai in northern France.

Macron had earlier held talks with Renault chairman Jean-Dominique Senart.

The automaker, in which the French state holds a 15 percent stake, is set to unveil this week a sweeping revamp of its operations as well as its partnership with Nissan and Mitsubishi.

Even before the current crisis, it had been rocked by the departure of emblematic CEO Carlos Ghosn, who was arrested in Japan in November 2018 over allegations of financial misconduct, including under reporting salary and misuse of company assets at Renault partner Nissan.

Brazilian-born Ghosn, who also has French and Lebanese nationality, is now in Lebanon, where he fled in December after jumping bail in Japan.