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UK Proposes First EV Subsidies for Businesses

Both businesses and consumers, if they can afford electric vehicles, stand to benefit from the costly subvention.

by on Dec.10, 2009

That would be taxpayer money, lots of it, at the other end of the cord.

That would be taxpayer money, lots of it, at the other end of the charging cord.

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.

Watching Your Wallet!

Watching Your Wallet!

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.


Johnson Controls Says Hybrids Not Competitive

Largest global producer of batteries is challenged by their cost.

by on Oct.13, 2009

Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG, Head of Mercedes-Benz Cars presenting the new S 400 BlueHybrid at the 2008 Paris Motor Show

“The industry has done a good job of making people comfortable with hybrid technology, but the economic equation is not there.”

The largest maker of automotive batteries in the world said today that without government subsidies, the batteries used in electric vehicles and hybrids will not allow for commercialization on a large scale.

The analysis is significant since Johnson Controls launched the industry’s first mass production lithium-ion battery plant in France, and is a leader in battery technology.

In a presentation to analysts today, MaryAnn Wright, Vice President and Managing Director Business Accelerator for Advanced Energy Storage Solutions at Johnson said that a positive economic equation is not possible without subsidies of at least $7,500.

“We can achieve — with subsidies  — a total cost of ownership that is competitive with internal combustion engines,” Wright said. She was using a three-year analysis of a vehicle, which included an above average retention residual value.

Get Plugged In!

Get Plugged In!

However, even with Johnson’s goal of reducing costs of advanced Li-ion batteries by 50% during the next five years, taxpayer grants are still needed for mass production.