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Emmanuel Macron — the French President — announced the launch of an $8.78 billion (€8 billion) plan to coax the European Union member's motor industry back to life, which was devastated from a loss of sales and production in the wake of the COVID-19 coronavirus pandemic and subsequent lockdowns designed to slow the spread of the illness, according to a public statement Macron made in northern France on Tuesday.
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France pledges $8.78 billion to auto industry recovery
The new plan was announced on Tuesday and includes subsidies for buyers of hybrid and electric cars and support to further research into hydrogen power and self-driving cars. It also aims to ensure that the country's auto industry assembler and supplier workforce may survive the COVID-19 crisis and emerge as leaders in the global industries of manufacturing and exporting ecologically-friendly vehicles.
Macron explained that the goal of the move was to "relocalize" manufacturing within France and "to make France the leading country in Europe for the production of clean vehicles," with a final annual output target of 1 million by the year 2025, reports the Financial Times.
He described the recovery plan as a three-way bargain between employees, manufacturers, and the state — with automotive companies making French-based investments in production in exchange for government support.
French auto industry subsidies to 'go green'
The owner of the Citroën and Peugeot brands has already pledged to increase its output of clean cars from zero in 2019 to 450,000 annually, while another company, Renault, aims to triple its production by 2022.
Renault is nearing an awarded a roughly $4.4 to $5.5 billion (€4 to €5 billion) credit line from the French government, and will become the third partner next to PSA and Total subsidiary Saft — in a multi-billion-dollar venture to manufacture electric vehicle batteries inside the EU — as of writing, the lion's share come from South Korea and China. The French state owns slightly more than 15% of Renault.
A long-time champion of European industrial "sovereignty" via investments in tech sectors typically dominated by U.S. and Asian competitors, Macron spoke from the Etaples factory of motor industry supplier Valeo, close to Le Touquet in northern France.
Auto sales shaken in wake of COVID-19 crisis
Sales of cars have fallen sharply amid France's nationwide and two-month lockdown, which came to an end two weeks ago. Macron added that some of the subsidies — which could be used for efficient gas or diesel vehicles — would shift unsold cars produced in the last few weeks, according to Financial Times. One person buying a new electric car might receive a subsidy upward of €7,000 for their ecologically-friendly purchase.
This comes roughly a month after U.S. oil fell almost 300% and closed below $0 for the first time in history in the wake of a sharp drop in consumer demand for crude oil. Nearly every major industry in the world has taken a hit from measures taken to slow or stop the spread of the COVID-19 illness, but as the greatest world economies move for a slow reopening, the following months could see unprecedented levels of cooperation between private and government institutions.