The French government, dealing with the imminent closure of a Peugeot car plant, presented an aid plan for the flagging auto industry on Wednesday.
The new offering will increase cash incentives for buyers of fully electric cars to 7,000 euros ($8,500) from 5,000 euros at present.
Subsidies on hybrid cars, made in France by Peugeot but also by Toyota, will double to 4,000 euros.
The French government's aid package will also free up 150 million euros in state-backed loans to auto industry sub-contractors, hit hard by the slowdown, and oblige the government to make a quarter of its car purchases electric or hybrids.
Arnaud Montebourg, Hollande's "Minister for Industrial Renewal", will be under the spotlight as he outlines the auto plan the same day Peugeot posted a big first-half loss and workers protested at the Aulnay plant closure in 2014, the first car plant to shut in France for 20 years.
The subsidy rises, due to take effect at the end of the year, are aimed at boosting sales of Renault's French-made "Zoe" electric car and Peugeot's diesel-electric hybrids.
Despite high fuel prices and Diesel new car sales reaching 70% market share, environmentally friendly cars has barely taken off in France, despite existing incentives electric and hybrid vehicles make up only 0.2 percent and 0.8 percent respectively of new car registrations in the first quarter.
Toyota produces its hybrid Yaris in France, but the subsidies also benefit Japan's Mitsubishi, which makes Peugeot and Citroen's small electric cars.