President Emmanuel Macron has announced an €8bn (£7.1bn) rescue plan to revive the French car industry.
His proposal, which came during a visit to the Valeo car factory in Etaples, includes €1bn to provide grants of up to €7,000 to encourage people to buy electric vehicles.
This breaks down to €5,000 for each company purchase and €2,000 per hybrid rechargeable car.
PSA, which owns Peugeot and Citroen, and Renault, the country’s two biggest car manufacturers, have promised to focus production in France in return.
President Macron said: "We need a motivational goal - make France Europe's top producer of clean vehicles by bringing output to more than one million electric and hybrid cars per year over the next five years.”
He added that no car model currently produced in France should be manufactured in other countries.
The "historic" intervention will aim to turn France's rechargeable car industry into Europe's biggest, the president said.
Starting June 1, there would also be an aid of €3,000 for converting from a petrol-fuelled car to a less-polluting one - and as much as €5,000 to upgrade to an electric vehicle.
He said that some three quarters of French citizens would be eligible for the incentives.
It comes as the sector has been brought to its knees due to halted production and loss of sales due amid the coronavirus pandemic. The motor industry is also bracing for thousands of job cuts.
Car sales have tumbled 80pc during France’s two-month nationwide lockdown, which ended two weeks ago. By the end of June, some half a million cars will have gone unsold.