(Bloomberg) -- Renault SA will invest more than 1 billion euros ($1.18 billion) to boost production of electric vehicles in France in a move that could go some way at smoothing rocky relations with the French government, its biggest shareholder.
Renault will equip four French sites with new electric car production capacity to increase output and update its models, it said Thursday in an emailed statement. Earlier Thursday, the French government confirmed it would vote against Chief Executive Officer Carlos Ghosn’s compensation last year, after extracting a commitment to cut his pay by about 20 percent for this year. The company’s annual meeting will take place in Paris Friday.
“Renault is giving itself the means to maintain its leadership in the electric vehicle market,” Ghosn said in a statement. The investments “will increase the competitiveness and attractiveness of our French industrial sites.”
The commitment to build electric cars at French sites, aimed at securing future jobs as the industry undergoes unprecedented change, should help improve Renault’s standing with the French government. Other carmakers like Volkswagen AG and BMW AG are also investing heavily in new electric car lineups.
France, which holds a 15 percent stake in Renault with extra voting rights, agreed to renew Ghosn’s mandate in February in exchange for a pay cut in 2018 and a pledge for Ghosn to work on a deeper partnership with Nissan Motor Co. Tensions have lingered since President Emmanuel Macron spearheaded a stake purchase three years ago.
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