France launches 'battle of the electric car'

Simon Boehm Yahoo News 1 Oct 09;

PARIS (AFP) – France launched the "battle of the electric car" Thursday as it unveiled plans to invest 1.5 billion euros on infrastructure for the two million electric and hybrid cars it wants on the road by 2020.

"No player can take the risk alone, but if all the actors take it at the same time, that works," said Ecology Minister Jean-Louis Borloo, flanked by top executives from French carmakers Renault and PSA Peugeot Citroen.

The aim is to "make the French energy and car industry a world leader," Borloo told reporters as he presented his government's strategy on helping reduce C02 emissions via eco-friendly cars.

The project covers everything from industrial research, making batteries, producing clean cars and building a nation-wide network of battery-charging stations.

The electric car plan comes just a couple of weeks after Borloo said France would invest more than seven billion euros (10 billion dollars) to develop freight transport by rail and reduce road traffic.

The schemes are part of President Nicolas Sarkozy's "green plan" for France that aims to reduce greenhouse gas emissions blamed for global warming.

Sarkozy last month announced a new carbon tax on businesses and individuals that will come into force next year to encourage consumers to cut down use of oil, gas and coal.

Currently only a few thousand of the 30 million cars on French roads are electric or hybrid vehicles, so building up that number to two million will require major investment.

Of the total 1.5 billion euros (2.2 billion dollars) earmarked, 900 million euros could come from a state loan due to be launched next year, said Borloo.

The money will be used mostly to build infrastructure but also to buy cars and on subsidies for both makers and buyers of clean vehicles.

Under the plan, a million battery-charging points will be built by 2015, 90 percent of them in private homes but also in car parks and at roadside sites.

From 2012 all new apartment blocks with parking lots will have to include charging stations, and the network will grow to a total of four million points by 2020, the equivalent of two per vehicle.

The state will help build up the battery production sector by contributing 125 million euros from its strategic investment fund to the overall cost of 625 million euros for a Renault battery plant at Flins, near Paris.

The state will also give Renault a loan of up to 150 million euros to build an electric car factory, also in Flins.

One hundred million euros will also be made available for other electric carmakers such as Peugeot or Daimler's Smart division, officials said.

Joint purchases by state authorities and major private companies will see orders for 100,000 electric vehicles by 2015, according to the plan.

By 2030 the emissions-free vehicle sector in France is projected to be worth some 15 billion euros, representing 27 percent of the total market, according to the ecology ministry.

Borloo insisted on the importance of all actors in the sector committing themselves to victory in what he called "the battle of the electric car."

Peugeot-Citroen chief executive Philippe Varin told the same press conference that "we share the ambitions of the government in terms of C02."

Renault's chief operating officer Patrick Pelata said "we are on the same wavelength as the government."

The two French automakers presented their solutions for tomorrow's cars -- electric or hybrid -- at the Frankfurt Motor Show earlier this month.

Renault introduced four electric prototypes in Frankfurt that cover the range from small urban to commercial vehicles.

The firm believes that by 2020 electric cars will make up more than 10 percent of the market and hopes to present its electric cars by 2011 and have them ready for the market the following year.

Electric vehicles were the star of the Frankfurt auto show but experts predict that cars will roll on a variety of power sources for quite a while.