TORONTO (Reuters) - The province of Ontario moved on Wednesday to reduce the sticker shock of plug-in hybrid and battery-electric vehicles by offering rebates of between C$4,000 ($3,570) and C$10,000, starting July 1, 2010.
Ontario Premier Dalton McGuinty said the aim was to have one out of every 20 vehicles in Canada's most populous province to be electrically powered by 2020.
"This will be the most attractive rebate, certainly in North America," McGuinty said at a press conference. "It may be the most attractive rebate ... in the world."
Buyers of electric cars will also get special green license plates that will allow them to use carpool lanes, even if there is only one person in the vehicle, as well as access to public charging facilities and parking at Ontario government and GO Transit commuter lots.
The government also committed to adding 500 electric vehicles to its public service fleet.
The size of the rebate will depend on the vehicle's battery capacity. Plug-ins can be more environmentally friendly than regular gasoline-electric hybrids as they can run purely on electricity, but the need for bigger batteries makes them more costly.
McGuinty made the announcement while standing in front of a Chevrolet Volt, a plug-in electric hybrid that General Motors Corp plans to roll out by late 2010.
The Volt is expected to cost US$40,000, with the large, lithium ion battery making up a good chunk of the cost.
"We want to make it easier to buy green cars," McGuinty said.
California-based company Better Place is partnering with Ontario to build the public charging facilities. It also plans to develop a more extensive infrastructure network for electric vehicles in the province and will be opening an electric car demonstration center in Toronto in about a year.
Sean Harrington, market manager for Better Place Canada, applauded the Ontario government's initiatives.
"Those things are needed to really get the ball rolling here and to get companies and investors and people creating the infrastructure, creating the services that are needed to make this big transition to electric vehicles."
All the major auto manufacturers plan to introduce some form of plug-in hybrid or battery-electric vehicle over the coming years.
Ford Motor Co plans to introduce a battery-powered commercial van in 2010, a battery-powered small car the following year and a plug-in hybrid to challenge the Volt starting in 2012. Toyota Motor Co plans to start mass producing plug-in hybrid vehicles by 2012.
Toronto-based Zenn Motor Co, which builds electric vehicles for use in low-speed areas, was excluded from Ontario's rebate program because its cars have not been deemed safe for highway use.
But that won't always be the case, said Catherine Scrimgeour, manager of public affairs at Zenn.
She said the company plans to have a prototype for a highway-capable car by the end of the year, with commercial availability by 2010. It also plans to develop pure electric drive trains to sell to other automakers.
"We are actually very, very encouraged and feel that this is a positive step," she said.
Scrimgeour said she was also encouraged by McGuinty's statement that he wanted Ontario to be a center of production for electric cars.
"Neither the Chevy Volt, nor the (Toyota) Prius are manufactured in Ontario and as an electric vehicle manufacturer based in Ontario, we would like to see what the province's support will look like," she said.
Reporting by John McCrank; editing by Rob Wilson