Israel Leads Quest for Electric Car
Nissan Chief Executive Carlos Ghosn announced today that his company plans to sell an electric car in the US and Japan by 2010, making Nissan the first major automaker to bring a zero-emissions vehicle to the American market.
Just a few years ago, Ghosn was wary of the "green" vehicle crowd, writing off the gas-electric hybrid as a "niche product," useful only to meet strict fuel-economy and emission standards in states like California. Pollution regulations were not enough to convince entrepreneurs like Ghosn that the venture was worth their investment.
But government incentives were.
Before he rolled out his recent plan for electric cars in the U.S., Ghosn had been involved in a joint venture with American-Israeli entrepreneur Shai Agassi to sell electric car transportation in Israel. The Israeli Cabinet is supporting the project by subsidizing the vehicles with sharp tax cuts for consumers.
Israeli Prime Minister Ehud Olmert "intends to make Israel a laboratory" in the development of the world's first fleet of electric cars. To that end, Israel is enforcing a new policy that taxes cars based on their emissions levels. Electric cars will be taxed at a 10 percent rate, compared with 79 percent on gas-powered cars and 30 percent on hybrids.
At the end of the clip, Olmert talks about his vision for electric cars in Israel.
"We would never have done this if the Israeli government was not encouraging it," [Ghosn] said. "Whoever puts the most incentive on the table is going to get the technology first."
The Israel collaboration will sell electric car transportation on the model of the cellphone:
Purchasers get subsidized hardware - the car - and pay a monthly fee for expected mileage, like minutes on a cellphone plan, eliminating concerns about the fluctuating price of gasoline... The state will offer tax incentives to purchasers, and the new company, with a $200 million investment to start, will begin construction of facilities to recharge the cars and replace empty batteries quickly. (NYT)
When Israel wanted to get serious about promoting electric vehicles, it didn't just tighten fuel-economy standards and hope for an industry revolution - it took direct government subsidies to make this project work. It goes to show that the money for energy innovation can come from a variety of sources: direct government investment in RD&D, or smart tax policy like the one Israel just instituted.