Paris, Oct 10 (DPA) The French government will provide funds to subsidize the development and construction of environmentally friendly automobiles, President Nicolas Sarkozy said Thursday.”We will earmark more than 400 million euros ($550 million) of state funds over the next four years,” Sarkozy said in an address at the Paris Automobile Fair.

The money will be used “exclusively” to fund the research and development of “carbon-free cars, that is vehicles with the least possible emission of carbon dioxide, whether electric cars or hybrids,” Sarkozy said.

In his speech, the French president also said he would ask the European Commission to loosen regulations on state subsidies to enable EU governments to better support ecological policies.

The aim of looser regulations would be to “align the EU’s state-aid framework with the aims we are pursuing within the scope of our climate-energy package,” Sarkozy said.

Thursday, French car-makers Renault-Nissan and PSA Peugeot Citroen signed separate agreements with the largely state-owned energy supplier EDF to establish programs for the eventual commercialization of electric cars.

The agreement between EDF and Renault-Nissan calls for the development of batteries and the construction of a network of “charging” stations throughout France by 2011.

PSA and EDF agreed to collaborate on the “definition of economic models to favour the commercial development of electric vehicles, the new technologies of energy storage, notably lithium-ion batteries, (and)… standardizing the communication between vehicles and the charging system.”

EDF chief Pierre Gadonneix said, “This new collaboration is an important step in the development of electricity, notably in transportation, as a clean and competitive source of energy that respects the planet and the needs of individual mobility.”

Renault head Carlos Ghosn said he expects that a newly developed E-car will be on the market by 2012. According to forecasts, some 10 million E-cars will be sold globally by 2016.