By Laurence Frost and Gilles Guillaume
SOCHAUX, France (Reuters) - PSA Group (PA:PEUP) is pressing the French government to revive sales incentives on rechargeable hybrid vehicles as it rolls out plug-in versions of its larger models to meet tightening European emissions rules, the carmaker said on Thursday. Automakers are rushing to deploy electric cars and hybrids, which combine battery power with a combustion engine, to meet EU carbon dioxide limits and avoid hefty fines.
"We’re asking for the reinstatement of incentives on plug-in hybrid vehicles," said Laurent Fabre, a governmental affairs executive for the maker of Peugeot , Citroen and Opel vehicles. While PSA is well placed among carmakers to meet the goals, its pure-electric programme will cover only the smallest cars - leaving its brands reliant on significant sales of rechargeable hybrids across the rest of their line-ups, from compacts such as the Peugeot 308 to the DS7 Crossback premium SUV. The collapse of fuel-efficient diesel sales has stiffened the challenge across the industry, causing CO2 emissions to begin rising again after years of improvement. While diesels produce more toxic nitrogen oxides (NOx) and particulates than gasoline engines, their efficiency has been instrumental in cutting greenhouse gases. France, by far PSA’s biggest market, currently offers a 6,000 euro ($7,000) subsidy on each electric car sold, but an earlier 1,000-euro plug-in hybrid incentive was scrapped last year.
Financial support for low-emissions vehicle sales will be reviewed under draft 2019 budget proposals to be presented to ministers on Sept. 24. PSA’s French rival Renault (PA:RENA) supports the call for the rechargeable hybrid incentive to be reinstated at 2,000 euros, Fabre said, adding the measure would cost taxpayers 40 million euros – based on expected sales of 20,000 vehicles.
Plug-in hybrids, which avoid the range constraints of battery-only cars, offer the most reliable way to “kick-start the market” for electrified vehicles, Fabre said, adding the government was “attentive” to these considerations.
A Renault spokeswoman said the carmaker had no immediate comment on the matter.
Over the next two years PSA plans to launch eight new plug-in hybrid models, starting with the DS7 Crossback, and seven smaller pure-electric models.
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