Berlin to double e-car R&D to boost market

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BERLIN, May 17 (UPI) -- The German government has pledged to double sustainable mobility research to nearly $1.4 billion to reach its target of having 1 million electric cars cruise the country's highways by 2020.

Berlin plans a range of measures that include tax breaks and free parking spaces for e-cars to turn Germany into "the leading supplier and the leading market" for electric mobility, Chancellor Angela Merkel said Monday in Berlin. The electricity for Germany's e-car fleet is to come mainly from renewable energy sources, she added.

Eager to reduce the dependency on imported oil and cut carbon dioxide emissions from road traffic, Merkel's government wants to have 1 million e-cars on Germany roads by 2020 and 6 million by 2030.

Those are ambitious targets that would be missed in case of government inaction, experts warned. Of the more than 42 million cars registered in Germany, only around 3,000 are electric.

Germany's powerful car industry, which includes giants Volkswagen, Daimler and BMW, has been criticized for being late to the e-car game, with rivals from France and Asia ahead when it comes to launching serial production.

Merkel said she's confident the German industry will be able to compete with international competitors.

German car makers will invest more than $24 billion in the next three to four years into the sustainable mobility sector, Merkel said. The entire e-car market could create 30,000 new jobs by 2020, she added.

"I believe that things will now develop massively here," Merkel said.

The $1.4 billion her government plans to dish out until 2013 would be used for battery and charging technology as well as infrastructure and materials research, she said. Starting that same year, every 10th car the German government purchases will be an e-car, she said.

In a bid to convince private customers to buying the more expensive e-car, Berlin plans to eliminate the motor vehicle tax for the first 10 years after a green car's registration. That could add up to several thousand dollars in savings. Parking spaces with e-car charging stations and lanes reserved for e-cars are additional incentives the government plans.

As of now, Germany won't, however, directly fund e-car sales, Merkel said.

Officials from the German car sector have in the past called for direct purchase subsidies. The United States, France and Italy, nations with powerful car sectors that compete with the Germans, have introduced purchase funding ranging from $5,000 to $9,000 per car.

"We believe it's not the right incentive," Merkel said, adding that funding the domestic battery sector instead would ensure that e-car production stays in Germany.

In what may be seen as a concession to the industry, Merkel vowed to re-evaluate the measures "year after year" to see "if we may have to readjust our focus."

Speaking at the same news conference, Germany's newly inaugurated Economy Minister Philipp Roesler said it was key that electric mobility regulation was standardized across Europe, possibly globally.

"One thing is clear: Whoever knows and sets the standards also owns, to a certain degree, the market," he said.

The German Cabinet is expected to discuss and adopt the e-car package Wednesday.