Britain's fledging auto industry received a boost when the government announced £100 million to help it develop electric and other ultra-low emission cars in which the government will fund up to 100 electric vehicles to test how they operate in real-life driving conditions.
Gordon Brown has come down heavily on OPEC for cutting oil production when the world is going through an economic crisis.
He has also championed electric cars as a means of cutting dependence on oil and thereby reducing the UK's carbon emission level by 80 per cent of which road transport accounts for 20 per cent.
Transport secretary Geoff Hoon outlined the scheme to fund the development of electric cars and said that the government had shortlisted 10 companies that would compete to supply low-carbon vans to local councils and government bodies so that the electric vehicles could be tested in real-life driving conditions.
He said that the scheme had the potential to create up to 10,000 jobs in the automotive sector.
Such vehicles are emissions free, and those available on the market usually cost between £9,000 and £12,000. Once fully charged they can travel up to 40 miles.
The government will also give £20 million for research and development in technology to make electric and other green cars more affordable since at present the price of electric cars is very high, the function of their batteries and the problem of recharging since Britain does not have a network of charging centres.
The government also revealed new research, suggesting that if cars are charged at non-peak times, the "widespread" use of electric cars could be supported without the need for large numbers of new power stations.
Ford Motor, Mercedes-Benz, Citroen and Land Rover are among the companies that will compete for the government's £20 million trial of "green" vans to be tested by public sector organisations including a number of councils such as the Royal Mail, and Coventry, with Liverpool, Newcastle, Gateshead, Glasgow and Leeds, will be among the first councils to test green vans.
The £20 million research programme announced is distributed in three parts:
- £10 million for research in the private sector on cost-effective and higher performing all-electric and hybrid vehicle technology;
- Between £5 million and £10 million for a more open research competition for wider collaborative projects on low carbon vehicles;
- And, around £3 million for university research on lower carbon vehicle technology.
Not everyone is impressed, however. The taxpayer-backed project came under fire from environmentalists who said the motor industry had reneged on promises to produce less-polluting cars.
In the US, Detroit's three crisis-ridden carmakers recently secured $25 billion (£16 billion) in low interest loans to retool their ageing plants to produce lower-emission models such as GM's Chevrolet Volt, a plug-in car planned to launch in late 2010.
Carmakers are urging the European Union to offer a €40 billion (£32 billion) package of similar soft loans. Nicolas Sarkozy, the French president, this month said he would make €400 million of public funds available to support the roll-out of electric vehicles.
In Britain, some car companies still think government could move faster to promote electric vehicles apart from offering free parking for electric cars in London, citing more generous incentives in other EU countries such as Switzerland and France.
Global carmakers including Renault - Nissan, Daimler, General Motors and Mitsubishi plan to introduce plug-in electric or hybrid passenger cars from 2010-11. Daimler's Smart brand and Toyota are road-testing prototype plug-in models in London.
Land Rover is developing a lower-emission variant of a van based on the Discovery chassis using stop-start technology. This switches off the engine when it stops in traffic and restarts when the accelerator is pressed.
A string of other companies, including US-based Fisker Automotive and French maker Venturi, are also building electric or hybrid vehicles. Leading Japanese manufacturer Toyota, meanwhile, announced earlier this year that it had sold more than 1 million of its market-leading Prius hybrid cars.
The only electric car manufacturer in India is Reva, which manufactures 6,000 cars per year and has sales in the domestic as well as international markets.
Reva's electric car is sold in the UK market under the brand G-Wiz, through its UK distributor, GoinGreen, which expects a huge demand for such cars in the near future. Reva has so far sold 2800 electric cars in the UK.
Since there is a demand in the overseas market the company is now aiming to set up another plant in 2009 with an aim to boost its production to 30,000 cars annually.
Tata Motors of India plans to introduce the electric version of its Indica hatchback, the 'Indica ev' in Norway in 2009 and a year later in India. (See: Tata Motors to launch electric 'Indica EV' in Norway) The car can run for 175 km to 200 km when fully charged with a "two-pack" battery, though mileage could vary according to the type of battery used.
The Ajanta Group at Morbi in Rajkot, has also embarked on research and development on small electric cars and launched a demo model of its small e-car under the brand name 'Oreva' at a showroom in Rajkot.
MidAmerican Energy Holdings, a unit of Warren Buffett's Berkshire Hathaway, has bought a 10 per cent stake in Chinese rechargeable battery firm BYD Automotive, a Hong Kong-listed company developing electric-hybrid cars, for $230 million. The company claims to have developed lithium-ion batteries that can provide enough power for an electric car to travel 190 miles on a single charge. A full charge needs nine hours using its lithium-ion batteries, although they could be charged to 80 per cent capacity in 15 minutes.