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Nations tying incentives to green autos

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Nations tying incentives to green autos

U.S. likely to top most deals as budget woes lead some countries to scale back plans

David Shepardson / Detroit News Washington Bureau

The global race is on to boost sales of fuel-efficient and electric vehicles.

But with big budget problems, many countries are scaling back their initial incentives for electric vehicles. Most won't be as generous as America's.

The United States offers tax credits of up to $7,500 toward the purchase of extended-range electric vehicles and fully electric vehicles. The total could reach $2 billion over the 10-year life of the program, which was enacted in 2008.

General Motors Co. and Nissan Motor Co. are preparing to sell electric vehicles around the world. GM plans to offer its extended range electric Volt in China and Canada next year.

The United Kingdom announced Wednesday that it will set aside $67 million in grants starting next year to reduce the price of electric vehicles for customers.

But in March, the U.K.'s prior government announced it would spend $360 million. The new British government will reassess whether to spend more in 2012.

The revised rebate would cut about $7,800 off the purchase of an electric vehicle through early 2012. The program could help up to 8,600 buyers.

The Republic of Ireland announced a similar tax break for electric vehicles in April.

Other European countries are providing incentives, too. Belgium is offering $11,700; Denmark, Greece and the Czech Republic exempt electric car owners from registration fees and road taxes.

French motorists can get a $6,500 incentive for buying an electric vehicle, and $2,600, or up to 20 percent, toward the purchase of some hybrids through 2012.

In Canada, Ontario's government wants 5 percent of all vehicles to be electric by 2020. Last month, the province scaled back its planned tax incentive from the $10,000 maximum announced last summer to $8,500.

Only the first 10,000 plug-in vehicles will qualify for the program, which could cost the government up to $85 million. Owners will get green license plates that will allow them to drive in carpool lanes until 2015 or longer.

Australia will spend $360 million, or $2,000 per vehicle, on a "cash for clunkers" program that hopes to get 200,000 vehicles produced before 1996 off the roads.

China gets in game

China is offering up to $8,800 to local governments and taxi fleets, as well as buyers in five cities, to buy electric vehicles and some hybrids.

By contrast, the United States spent nearly $3 billion last year to help automakers sell nearly 680,000 vehicles.

Congress is considering going further.

A Senate bill introduced this summer would extend the $7,500 tax credit for 200,000 plug-in vehicles per manufacturer to 300,000. Last year, the Senate unsuccessfully proposed extending the credit to 500,000 vehicles per manufacturer in the stimulus.

Limit to credits

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said government incentives are essential to making electric vehicles a success -- and to boosting production and reducing battery costs.

"These credits are a bridge for the technology to get competitive," Cole said.

"You can't live on credits forever."

Within a decade, the cost of an electric vehicle could be just a few thousand dollars more than a traditional vehicle, he said.

Many U.S. states are offering rebates or incentives on top of federal ones. Gov. Jennifer Granholm said last month she'd like to do the same, but Michigan can't afford it.

California will offer some incentives for fully electric vehicles; Chevy's Volt won't qualify since it has a gasoline motor.

The Nissan Leaf is expected to gain access to California's HOV lanes with a single driver and get a $5,000 state tax rebate from California.

From The Detroit News: http://detnews.com/article/20100729/AUTO01/7290345/1148/auto01/Nations-tying-incentives-to-green-autos#ixzz0v4tlgdUF

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