Home Auto Trends ELECTRIC CAR: FRANCE INJECTS $8.8B INTO AUTO SECTOR.

ELECTRIC CAR: FRANCE INJECTS $8.8B INTO AUTO SECTOR.

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The French Government has announced an 8 billion euros ($8.8 billion) aid package to help the auto industry recover from the coronavirus crisis, including increased incentives for new electric vehicles and boosting a scrapping program to get higher-polluting older models off the road.

Speaking Tuesday at a Valeo parts factory in northern France, President Emmanuel Macron said the Government wanted France to be the European leader in EVs by getting automakers to repatriate production from abroad and develop new models on French soil.

“We need a motivational goal: Make France Europe’s top producer of clean vehicles by bringing output to more than 1 million electric and hybrid cars per year over the next five years,” Macron said at the news conference.

To help reach that aim, Macron said France would increase the state bonus for private consumers buying electric cars (that cost up to 45,000 euros) to 7,000 euros from 6,000 euros.

Business customers can get a 5,000 euro bonus. There will be a 2,000 euro bonus for plug-in hybrid vehicles, as long as they can travel at least 50 km on battery power alone and cost no more than 50,000 euros.

The more generous bonus for EVs will be available from June 1 until Dec. 31, 2020.

Macron is also doubling the trade-in premium designed to get older, less-efficient models off the road. People who buy a new or used latest-generation gasoline or diesel model can get 3,000 euros, while full-electric models are eligible for a 5,000-euro bonus.

Income requirements for the program are being relaxed so that 75 percent of French households are eligible, Macron said. 

The doubled bonuses will be available starting June 1 and will last until 200,000 cars are sold. A buyer turning in an older car for a new EV could be eligible for up to 12,000 euros under both programs.

In all, France will set aside more than 1.3 billion euros to jump start demand and reduce dealers’ stocks.

Sales fell 72 percent in March and 89 percent in April under lockdown measures to slow the spread of the coronavirus.

“This is a historic plan for a historic situation,” Macron said.

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