Government aid boosts electric-car development

Governments are pumping more money into electric car projects, hoping the new vehicles can be part of the solution to major problems from global warming to dependence on oil. China, the U.S. and France are among the governments that have so far pledged to spend up to US$15 billion in the next five years in tax incentives, levies, subsidies and consumer bonuses to help car companies develop electric cars, according to the Boston Consulting Group. The aid is crucial to carmakers’ chances of success in turning electric cars into mass-market products. The main way governments are contributing to electric-car development is through consumer incentives. France has announced a €5,000 bonus (US$7,481) for buyers of cars with very low emissions, and it slaps a penalty tax on gas-guzzlers. China is running a 20 billion yuan (US$2.93 billion) incentive program for public and service-sector vehicles, such as buses, taxis and government-use vehicles. In Japan, central and local government subsidies amount to US$10,000 per car in some cases. (October 21, 2009)