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Employees, wearing protective face masks, work on the automobile assembly line of Renault ZOE cars at the Renault automobile factory in Flins as the French carmaker ramps up car production with new security and health measures during the outbreak of the coronavirus disease (COVID-19) in France, May 6, 2020. REUTERS/Gonzalo Fuentes/File Photo

Renault must join French-German battery project: minister

Paris: Renault will have to join a French-German project developing batteries in order to receive a five billion euro ($5.4 billion) government rescue loan, Finance Minister Bruno Le Maire said Monday.

"Renault needs to make a commitment to become a shareholder in the electric battery alliance. It's one of the subjects that is still being negotiated," Le Maire told BFM television.

The automaker, in which the French state holds a 15 percent stake, is set to unveil this week a sweeping revamp of its operations as well as its partnership with Nissan and Mitsubishi, in the wake of falling sales and profitability that were amplified by the coronavirus crisis.

Several French production sites could be closed and Le Maire admitted that the government would not require Renault to swear off jobs cuts as a condition for receiving the bailout, saying that "grand proclamations" made in the past had already failed.

Most of Renault's models are already produced outside France in countries with lower production costs, and the company on Friday is to present details of a pledge to cut costs by a further two billion euros.

President Emmanuel Macron also plans to make "significant announcements" Tuesday to support the auto industry, which has been hammered by the factory shutdowns and dealership closures worldwide to stem the COVID-19 outbreak.

Le Maire indicated last week that the measures could include subsidies to encourage people to buy electric vehicles as European authorities seek to cut down on carbon emissions.

"It's a very efficient instrument" for helping carmakers unload their stocks of unsold vehicles, he said Monday, adding that the government would also help develop the country's network of charging stations.

The EU unlocked 3.2 billion euros last November for the European Battery Alliance and is seeking an additional five billion euros in private money to make next-generation power sources and reduce the continent's dependence on Asian battery imports.

Rival French automaker PSA, whose brands include Peugeot and Opel, is already part of the project.