Germany Races To Build Viable Electric Car

In effort to fast track development of electric cars, Germany approved a plan to spend $705 million over the next three years to help put 1 million electric cars on the road by 2020.

BERLIN (AP) -- Forget that they're cramped, have a limited driving range and outstrip the average consumer's pocketbook. The race is on to create a viable electric car.

Germany -- home to brands including Volkswagen, Porsche and BMW -- became the latest country to fast track development of electric cars, the government approving a plan Wednesday that aims to put 1 million of them on the road by 2020.

The goal is ambitious. Of the 41 million cars in the country, only 1,452 are electric, and Germany is entering an increasingly congested field.

This month alone, Nissan Motor Co. in Japan unveiled the Leaf, an electric car scheduled to go into mass production for a global market in 2012. General Motors touted triple-digit mileage figures for its rechargeable Chevrolet Volt. And President Barack Obama committed $2.4 billion in federal grants to develop next-generation electric vehicles and batteries in the U.S.

To help bring Germany up to speed, the government plans to spend some euro500 million ($705 million) on the plan over the next three years -- including euro115 million ($164 million) to establish eight test regions examining how the cars could best be introduced.

It plans to put euro170 million ($242 million) into battery research, making domestic production a priority and ensuring that German experts are trained in the technology.

"It is important that we couple a decreasing dependency on oil imports with not suddenly becoming dependent on battery imports," Economy Minister Karl-Theodor zu Guttenberg said.

The massive, sensitive, costly and fast-depleting batteries that take the place of international combustion engines and gasoline are expensive to produce, and countries like South Korea and Japan are far ahead in research and development.

Electric cars are also more limited than their gas-guzzling cousins, running 40 and 120 miles (60 to 200 kilometers) on a charge, while taking anywhere from two to seven hours to fully recharge.

Guttenberg said a market introduction plan would be examined, and financing would be a question for the government that emerges from Germany's Sept. 27 election.

However, while the plan calls for electric cars to be put on the market starting in 2012, it does not specify what if any incentives might be offered to would-be buyers -- a point criticized as a weakness.

Electric cars are becoming a more common sight in European cities where the streets are narrow, parking spots are rare and traffic is thick.

From London -- where hundreds of the two-seater G-Wiz ply the streets -- to Berlin, the demand for the small vehicles is forecast to rise even as a long-lasting battery remains out of reach.

Analysts expect global production of purely electric cars to expand rapidly in the coming years. IHS Global Insight forecast that it will grow from nearly 9,500 this year to more than 58,000 in 2011.

Jay Nagley, the publisher of Clean Green Cars, a British online guide to environmentally friendly vehicles, said the G-Wiz, while ubiquitous, is technically not a car but an "electronic quadricycle."

He said the G-Wiz had limited appeal outside the British capital, where wealthier residents use it mostly to avoid parking fees and the city's hefty congestion charge.

"It's pretty expensive paying seven grand for a four-wheeled motorcycle. You'd be pretty brave to take it outside the city center," he said.

In April, London Mayor Boris Johnson launched a plan to get 100,000 electric cars onto the streets of London by 2015, including the creation of 25,000 charging stations.

He promised electric motorists an exemption from the congestion charge imposed on drivers in central London, an annual savings of up to 1,700 pounds (about $2,600).

Germany's Volkswagen AG, Europe's biggest automaker, has said it hopes to introduce its first electric cars on the market in 2013. Daimler AG, which has been testing an electric version of its two-seater Smart, is working with California-based electric car maker Tesla Motors Inc. on developing better battery and electric drive systems.

Tesla has earned praise for its low-slung Roadster, a $109,000 two-seat sports car that can get more than 200 miles on a single charge.

In the U.S., General Motors Co. plans to offer the Volt -- a hybrid electric car -- next year at a cost of about $40,000.

Ford Motor Co. will also offer an all-electric commercial van in 2010 and plans to have three other electric vehicles available in the U.S. by 2012. Johnson Controls-Saft, which will supply the battery system for the plug-in hybrid electric vehicle, is a joint venture between auto parts maker Johnson Controls Inc. and Paris-based battery producer Saft SA. Both companies are receiving tax credits and other incentives to assemble the cars and battery packs in the U.S.

Elsewhere, rival Mitsubishi Motors Corp. launched an electric vehicle in June, the 4.59 million yen ($48,300) i-MiEV, and other companies have plans in the works.

German officials insisted their country hasn't missed the boat. Transport Minister Wolfgang Tiefensee said even Japan hasn't yet achieved a "real breakthrough."

The government noted that the cars' batteries currently cost up to euro15,000 ($21,000), and wrestling the cost down will be important. They said other measures that will be considered include incentives such as special traffic lanes or parking spots for electric cars.

AP Auto Writer Kimberly S. Johnson in Detroit and Associated Press Writer Raphael Satter in London contributed to this report.

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