UK govt to give 25 pct subsidy to 9 new electric cars

The British government on Wednesday said all the nine electric cars, which will be bought in the country, are eligible for a subsidy of up to £5,000 (or $7,935).

Under the scheme, the government has pledged 43 million pounds ($68.24 million) until the end of March 2012 to help British motorists shift to low-carbon vehicles, UK government department of Transport said in a statement.

The first nine cars to become eligible for eco-friendly car grants are: Mitsubishi iMiEV; smart fortwo electric drive; Peugeot iON; Citroen CZero; Nissan Leaf; Tata Vista EV; Toyota Prius Plug-in; Vauxhall Ampera and Chevrolet Volt. More will follow next year, while the government would increase the number of charging points, the statement said.

Government action to support affordable vehicles and more local charging point's means we are on the threshold of an exciting green revolution - 2011 could be remembered as the year the electric car took off, Transport Secretary Philip Hammond said.

The British public has in the past shown it's ready to embrace new technology and take practical steps to adopt a lifestyle kinder to the environment, so we could really be at the start of something big, he said.

From 1 January 2011, Mitsubishi iMiEV, the Mercedes-Benz smart Fortwo ED or the Peugeot iON will start receiving the grants.

In United States electric vehicles (EVs) purchased in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to fuel the vehicle.

However, governments across the world have set aside billions of dollars in the form of subsidies for early adopters of these alternative energy cars and to boost production of batteries for such vehicles despite persisting doubts about how many people will actually buy them.

The Department of Energy said it is investing $2.85 billion in electric vehicles of which $2 billion will go to help US carmakers produce advanced vehicle batteries and drive train components. Around $400 million will be invested to buy, test, and deploy different types of electric vehicles in the marketplace, and $300 million in cost-share projects under the Clean Cities program.

Last month, China had said annual production of electric vehicles will hit one million units by 2020 and become world's largest auto market for new energy vehicles, which will hold the key for development of the country's auto industry.

The Chinese government is also developing the industry of energy-saving and new-energy vehicles as part of its green drive. A pilot program has been set up to promote energy-efficient and new-energy vehicles in 25 cities and popularize use of electric vehicles with the government providing subsidies for buying vehicles.

The development of electric vehicles is likely to get a further boost following the Chinese science and technology ministry's plans to revise policies for its development between 2011 and 2015.

An estimated 8.5 billion Yuan ($128.3 billion) has entered the electric car industry so far from capital markets. This fund is likely to help build up the country's battery output, which will be capable of supplying 150,000 electric vehicles by October 2011.

China, which is world's producer of cars, has the world's second largest number of vehicles after the United States and is also world's largest auto market. With its economy projected to continue growth during the next decade, China faces a daunting task in reducing emission of greenhouse gases and conservation of energy.

According to a recent report from Bloomberg New Energy Finance, plug-in electric vehicles, including plug-in hybrids and battery electric vehicles, have the potential to make up 9 percent of auto sales in 2020 and 22 percent in 2030 (1.6 million and 4 million vehicle sales respectively).