Think about electric incentives, Ontario

Jan 24, 2009

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This could be the price for Ontario to get into the electric car game:

Oregon Gov. Ted Kulongoski has proposed a $5,000 (all figures U.S.) tax credit for vehicles powered by plug-in batteries.

Promise of the incentive, now before the state legislature, was crucial in persuading a major Chinese car maker, BYD, to test its plug-in vehicle in Oregon.

It also helped Kulongoski to land a deal with Nissan Motor Co., in which the state government's fleet is to get plug-in cars in return for Oregon's electricity utility creating a network of battery-charging stations.

The aim is to make the state – with the most hybrid vehicles per capita in the U.S. – North America's leader in electric cars and, in the process, grab as many manufacturing jobs as possible.

Bear in mind that the United States already offers a $7,500 rebate on electric and other "zero emission" cars, and more could come in the stimulus package promised by President Barack Obama.

Oregon's ambition figured prominently in my recent interview with Richard Canny, a former Ford Motor Company executive who now heads Think, a Norwegian firm that's developing its own plug-ins.

As the Detroit auto show demonstrated, the industry is pushing hard on the electric accelerator. Think, of course, isn't alone. The major car makers as well as several well-financed newcomers from China and elsewhere are involved, so the competition among jurisdictions to attract them is likely to be fierce.

Last April, Think – with 17 years of experience building electric vehicles – announced plans to expand into North America. It intended, Canny says, to launch discussions about incentives and jobs with Ontario and other Canadian governments during the first quarter of 2009.

Those talks, like the rest of Think, are on hold. Expected financing fell through in December, thanks to the global recession and the reluctance of Norway's government to guarantee loans.

That forced the company to temporarily lay off 170 employees, halt production of its two-passenger City and stop development of the Ox, a five-seat crossover. It also postponed its North American venture.

While "discussions (with Queen's Park and Ottawa) would be premature at this point," Canny says, "it's certainly something we'll do when we're back on our feet."

With interim financing just secured, he expects work to resume in a month or two.

If that happens, Think will come calling with visions of the combined Oregon and U.S. incentives as a good opening bid from those seeking its business. Canny says his main goal will be measures to encourage people to buy the little car, which claims a range of 180 kilometres between charges and a top speed of 100 km/h.

Along with generous financial incentives, he'd consider rewards for Think drivers similar to the exemption they get from the congestion fee in London, England or the special access to high-occupancy lanes or free parking they get elsewhere.

"The opportunity (will be) there for states and provinces to stand out by doing things similar to what Oregon is doing," Canny says.

"We'd like Ontario to do something to get electric vehicles into Toronto ... With more Canadian incentives to buy or use our cars we'd put assembly or sourcing there."

The assembly process doesn't require a large plant, Canny says. It's just "trim and finish" at the end of a global supply chain. So the main opportunities would be with suppliers, and Ontario's big existing plants will likely be reduced as a competitive advantage.

Think's stance might seem audacious, perhaps ludicrous, given the company's size. But it's not alone. Most recently in Detroit, as Ford announced plans for its own electric car, it referred to the importance of incentives.

We are seeing the future and it won't come cheap.

Peter Gorrie is the Star's former

environment reporter. He can be reached at peter.gorrie@sympatico.ca

Toronto Star