PARIS (Bloomberg) -- France will gradually align taxes on diesel and gasoline and offer incentives to encourage consumers to swap diesel cars for electric models.
Starting in April, the government will pay a bonus of as much as 10,000 euros ($11,422) to consumers who buy an electric car to replace an old diesel vehicle, Energy Minister Segolene Royal said.
"We have to eliminate old diesel cars that are more than 13 years old and have no filters," Royal said. Measures against these types of polluting cars will make it "harder and harder" to use them, she said.
Renault welcomed the EV incentives. "It could help to convince buyers to try an electric car," a spokesman told Automotive News Europe.
A 10,000-euro rebate would reduce the price of Renault's Zoe subcompact EV to 12,400 euros from 22,400 euros. The price of the Nissan Leaf would fall to 14,390 euros from 18,090 euros.
The two models are France's best-selling passenger car EVs. French sales of the Zoe were 5,970 last year, according to analysts Inovev. Leaf sales were 1,604.
Renault said the final terms of the rebate program have yet to be finalized.
"We expect EV sales in France to increase substantially as a result of the measures," Evercore ISI Global Automotive said following the decision.
Royal's comments on diesel cars follow an announcement by the government in December that it will raise the so-called TICPE excise tax on diesel by 2 euro cents per liter, bringing in 807 million euros to state coffers in 2015.
French taxes are lower on diesel than on gasoline, which has encouraged consumers to buy cars that run on the cheaper fuel. Environmental groups have urged the government to align the levies while French carmakers have said measures should encourage motorists to replace old vehicles with newer models.
Aligning the prices would help reduce smog, Royal said on Wednesday. "Air pollution is a major public health issue," she said. "Sixty percent of the French population breathes air that isn't healthy."
Paris and other big French cities regularly issue warnings about air pollution caused in part by particulates from diesel fumes. Alerts in recent years have reignited debate over the taxes. Paris Mayor Anne Hidalgo last month announced measures aimed at phasing out diesel vehicles in the city by about 2020.
Domestic carmakers PSA/Peugeot-Citroen and Renault are among European automakers that market new diesel-powered vehicles as environmentally friendly because they can get more miles to the gallon than gasoline-fueled vehicles and are less polluting than older models.
"We have to be realistic because there are industries that make diesel cars, there are jobs involved" Royal said.
Sixty-four percent of new cars sold last year in France to consumers ran on diesel compared with a high reached two years earlier of 73 percent, according to the country's car manufacturers' association CCFA. In countries such as Germany and the UK with different tax regimes, the proportion of diesel cars was 47 percent and 50 percent respectively in 2013.
Overall, about 80 percent of French motorists drive diesel-powered cars.
Bruce Gain and Reuters contributed to this report
