Mr Collomb said that the attempted attack shows the threat France is facing is still very high and justifies its ongoing state of emergency, which was first introduced following the November 2015 attacks in Paris.
Two police officials told The Associated Press that a handgun was found on the driver, who they said was badly burned after the vehicle exploded.
Collomb says the situation is now under control but has been referred to the French government's anti-terrorism authorities.
Gerard Collomb told reporters that the man's motives were not immediately clear.
He added that Monday's incident showed that a new security law "is needed" in France and the measure would "maintain a high security level" beyond the end of the state of emergency.
Bomb squads are combing the area and the nearest subway station is closed to the public. It was the second major incident on the avenue this year.
A SUSPECTED suicide bomber died after crashing his auto into a police van on the Champs-Élysées in Paris yesterday.
Interior Ministry spokesman Pierre-Henry Brandet says the driver whose auto exploded as he tried to ram a police vehicle is "most probably" dead.More news: Greece hoping to finally secure long-term debt relief deal
The announcement on a police Twitter account advised the public to avoid the area, and came after people took to social media to report that a vehicle had caught fire in the area.
The French national gendarmerie service says the driver of a auto that rammed a law enforcement vehicle has been arrested. The incident took place at 3:40 p.m. local time (9:40 a.m. ET). Paris police said neither gendarmes nor passers-by were injured.
Wearing a white shirt and dark shorts, the suspect was seen lying prone on his stomach on the avenue, witnesses said.
And just hours before the Champs-Élysées incident, in another suspected terrorist attack, a driver rammed a van into pedestrians exiting a mosque in north London, killing at least one person.
Police cordoned off the area only a short walk away from Elysees presidential palace and the USA embassy, Reuters reporters on site said.
The police department tweeted the warning Monday without providing further details. France is under a state of emergency after a string of deadly Islamic extremist attacks.