October 2, 2009

France Rolls Out Plan To Boost Electric Car Industry

On Thursday, the French government announced its plan to invest 1.5 billion euros ($2.2 billion USD) in building up a nationwide infrastructure for the roughly two million electric and hybrid automobiles that it hopes to see on the road by 2020.

Of the roughly 30 million cars on French highways, however, only a few thousand of them are currently electric or hybrid"”a fact that has leading politicians calling for major investment in the industry if the two million benchmark is going to be reached in the next decade.

"No player can take the risk alone, but if all the actors take it at the same time, that works," explained the country's Ecology Minister Jean-Louis Borloo, at a meeting where executives from French carmakers Renault and PSA Peugeot Citroen were also present.

Borloo explained that the goal of the plan was designed to catapult the French energy and car industries into a position of world leadership in an effort to reduce carbon dioxide emissions.

The government funds will be distributed between industry research in battery and clean car production as well as a national network of battery-charging stations.

The unveiling of the so-called "battle of the electric cars" plan follows hard on the heels of another scheme announced just two weeks ago that the French government would invest some seven billion euros ($10 billion USD) in the development of a modern freight-transporting railway system in an effort to reduce congestion on the nation's roads and highways.

French President Sarkozy also announced his plans for a new carbon tax on businesses and private households that is set to go into effect next year.  All three interventions are critical elements of Sarkozy's "green plan" with which he hopes to drive down France's dependence on carbon-based fuel and lower its emission of greenhouse gases.  

Borloo says that nearly two thirds of the 1.5 billion euros ($2.2 billion USD) needed to fund the program will be procured through state loans set be started next year.

Included in the electric car plan is the construction of roughly a million battery-charging facilities by 2015, some 90 percent of which will be in private homes, while the other ten percent will be installed in car parks and at roadside stations.

Additionally, beginning in 2012, all new apartment buildings with parking lots will come equipped with battery-charging stations.  By 2020, the plan's architects say they hope to have some four million charging points throughout the country"”or nearly two per electric car.

The national government will also contribute 125 million euros ($182 million USD) to the construction of Renault's 625 million euro ($909 million USD) battery production and research plant on the outskirts of Paris.

In addition, Renault will receive a 150 million euro ($218 million USD) loan from the state to build a new electric car factory.  Other manufacturers such as Peugeot and Daimler's Smart branch will also be eligible for loans of up to 100 million euro ($145 million USD) for the construction of electric car production and research facilities.

The ecology ministry stated in the meeting that the emissions-free sector of the French automobile industry should be worth a whopping 15 billion euros ($21 billion USD) by the year 2030 and constitute an estimated 27 percent of the total market for vehicles.

Philippe Varin, CEO of Peugeot-Citroen, told reporters at the press conference that his company "share[s] the same ambitions of the government in terms of CO2."

Renault chief Patrick Pelata had a similar comment, saying that Renault leadership was "on the same wavelength as the government."

At the Frankfurt Motor Show in September, both Renault and Peugeot-Citroen showed off several new electric prototypes that they are attempting to brandmark as "the cars of tomorrow".

While the novel electric cars garnered much attention at the auto show, auto industry analysts predict that vehicles will continue to be powered by a variety of fuel sources"”including gasoline and diesel"”for some time into the future.