The French government Thursday rolled out a broad plan of state funding to kick-start demand for electric cars locally and to put France in the forefront of zero-emission vehicle technology.

The cornerstone of the plan is a budget of EUR1.5 billion in public funding to create one million recharging points for electric vehicles nationwide by 2015. Automotive industry analysts agree that demand for the new technology can never take off if governments don't provide support for the power-supply infrastructure for battery-powered vehicles.

The plan was drafted in collaboration with French automotive sector companies, local authorities, state and private vehicle fleet operators and power and infrastructure companies.

"No one can take the risk (of investing in zero-emission technology) alone. But if everyone takes the risk at the same time, it will work," Jean-Louis Borloo, minister for ecology, energy, sustainable development and the sea, told a reporters.

The government reckons that clean-vehicle technology will generate EUR15 billion of business activity between now and 2030. At the same time, it will reduce France's energy imports by 4 million tons of oil equivalent by 2020, while cutting carbon dioxide emissions by 17.5 million tons.

By 2025, Borloo's office said, zero-emission vehicles could represent a market of between EUR50 billion and EUR90 billion, and represent 27% of overall vehicle sales.

The government's aim is to set in motion a strategy that will lead to the production of two million vehicles using battery power for propulsion, either fully or partially, by 2020.

The government will legislate to oblige the inclusion of battery recharging points in the parking lots of new apartment blocks and office buildings, starting in 2012. Borloo said there would be tax breaks to encourage the installation of charging points in existing buildings.

Another key measure will be the establishment of a battery manufacturing factory at a plant owned by Renault SA (RNO.FR) at Flins, west of Paris, at a cost of EUR625 million and in cooperation with France's Atomic Energy Commission. France's Strategic Investment Fund will put up EUR125 million of the overall amount.

Borloo said the battery plant would be able to produce more than 100,000 batteries a year, and Industry Minister Christian Estrosi said the idea is that other French manufacturers of electric vehicles, including PSA Peugeot-Citroen (UG.FR), will source their batteries there.

However, Gregoire Olivier, Peugeot-Citroen's head of strategy and programs, said that's not a given, noting that the four electric vehicles that his company plans to launch into the market toward the end of 2010 will have batteries made in Japan by either GS Yuasa Corp. (6674.TO) or supplied by Switzerland's MES DEA SA.

"Renault is proposing that we buy their batteries, but we're very open about this. For our requirements, we'll go for the best value for money, and we'll put them in competition with other suppliers," Olivier said.

Meanwhile, a group of public and private fleet operators has already identified a need to purchase 50,000 electric vehicles through 2015. Borloo said the government reckons that by pooling purchasing there is potential to reach a fleet of 100,000 vehicles by that date.

Renault and alliance partner Nissan Motor Co. (7201.TO) have said they plan to invest a total of EUR4 billion in developing electric vehicle technology.

-By David Pearson, Dow Jones Newswires; +33 1 4017 1740; david.pearson@dowjones.com