Dion Smith has recorded a slice of New Zealand cycling history at the Tour de France.

Smith has pulled on the polka dot jersey at the end of stage two of the 2018 Tour, as leader of the King of the Mountains competition - making him the first New Zealander to ever wear a distinctive jersey at the famous race.

The 25-year-old is set to hold onto it for at least two stages, after outfoxing his breakaway companions on the only climb of the day.

"It's pretty special to be on the podium," said Smith.

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"To represent the country and Wanty-Groupe Gobert this way, it's very big."

Smith got in the early breakaway alongside Austrian Michael Gogl and French stalwart Sylvain Chavanel, and the trio worked together until the climb - which was more of a hill than a mountain, at just one kilometre in length and an average gradient of 3.6 per cent.

Once there, Smith smartly sat on Chavanel's wheel, using his positioning to his advantage before charging past him in the sprint for the solitary mountain point on offer.

The point put him tied at the top of the mountain classification with Kevin Ledanois, but because Smith is better placed on the general classification, he gets the honour of wearing the jersey - the first for his Wanty-Groupe Gobert team, and the first for New Zealand.

That was job done for Smith, who decided to sit up and rejoin the peloton, saving his reserves to ensure he would hold onto the jersey.

"The plan this morning was to get the jersey or at least score a point, then sit up and wait for the bunch to save some energy for the coming days," explained Smith.

"We have a GC rider, Guillaume Martin, so the team time trial is pretty important for the team. The objective is to have everyone as fresh as possible. That's the main reason why I came back to the bunch. It was a difficult decision but it was a team order and for sure I do agree with them."

Smith did well to come home safely in a chaotic finish, with a crash in the final two kilometres catching out race leader Fernando Gaviria, and leaving just nine riders fighting it out for the final sprint, which was won by Peter Sagan.

Arnaud Demare led out the sprint, but the three-time defending world champion Sagan was too strong, holding off Demare and the fast-finishing Sonny Colbrelli for his ninth Tour de France stage win, and to take possession of the yellow jersey.

Smith crossed the line in 42nd, moving into 34th overall, but most importantly, taking to the podium to put on the polka dot jersey.

Smith will wear the jersey in tomorrow's team time trial stage, and barring a crash, should be able to wear the polka dots for two famous days in world cycling's biggest race.