German Chancellor Angela Merkel announced Monday that the government would double the financial aid to electric cars by 2013 to maintain its leading position in the world auto industry.
By 2013, the German government will double its subsidies for electric cars to 2 billion euros (about 2.8 billion U.S. dollars), focusing on more powerful batteries, said Merkel after receiving a report from car manufacturers, unions and researchers.
Merkel said, "it's not easy for Germany to keep its top position for a second time in car industry within worldwide competition." But she stressed Germany must become "a market leader" in the new technology.
Compared with its Japanese rivals, German car manufacturers have been left behind, as Mitsubishi will begin to sell its all- electric car i-Miev this year, while Germany's first all-electric car will not come out until 2013.
Last year, German government has set up an ambitious plan for electric-car development, aiming to put 1 million electric cars on German roads by 2020.
The German government will use tax cut, reform and some other favorable conditions to encourage companies, individuals and governments to buy electric cars, instead of providing direct subsidy to buyers of electric cars.
Any electric car bought before the end of 2015, with emitting less than 50 grams of CO2 per kilometer, would be exempt from road tax for 10 years, Merkel said.
She also promised to reform the tax for company vehicles to attract companies to buy electric cars.
Ten percent of cars hired or bought by the government would involve electric cars, Merkel said. Electric cars would also be allowed to use bus lanes in towns, while some parking and charging would be free.
But she ruled out the way to offer subsidy to people who buy electric cars. "The direct purchase subsidy is not the right solution," Merkel said.