Since batteries for electric vehicles can cost as much as the car itself, and much more for larger ones, automakers are asking for huge taxpayer subsidies to aid EV sales.
The United Kingdom is the latest government to propose EV financial assistance.
In an historic announcement for the island nation, Chancellor Alastair Darling in his pre-budget report proposed that consumer incentives worth £2,000 to £5,000 ($8,100) would be available starting in 2011 to reduce the purchase price of electric and plug-in hybrid vehicles.
Substantial assistance for businesses buying EVs is also part of the budget; and it appears that the UK is the first government to do so.
“To help boost the number of electric cars on our streets, I have decided to exempt them from company car tax for 5 years. And I can also announce a 100% first year capital allowance for electric vans,” Darling said.
The latest announcement follows a £30 million “Plugged in Places” program launched last month to support the development of charging infrastructure in several UK cities.
The European Union is moving ahead — over automakers’ protests — with new CO2 standards for passenger cars that dictate a reduction in average CO2 emissions from new cars to 120 g/km. Fewer than 9% of the cars sold in the EU in 2006 met this level of emissions. The costs of are estimated at about €3,600 ($5,108) on average per car.