The German government has announced that by the year 2030, all new cars registered in the country must be electric vehicles. Earlier this year, the government of India announced a similar plan with the same deadline. Norway and the Netherlands are considering similar measures. These pushes come amid renewed international concern about pollution and climate change, even as the price of oil remains subdued. The news could be a blow to traditional automakers who resist the change in the U.S., Europe and Asia, but also a boon to electric car companies such as Tesla Motors Inc. (TSLA). Shares of TSLA are up 2.5% this morning. (For more, see also: Can Electric Cars Replace Gas Guzzlers.)

The Indian Plan

India wants to provide electric cars with zero down payment and become a 100% electric vehicle nation by 2030—an ambitious goal for the second most populous country on Earth. The Power Minister of the country has stated, "we [can] actually give electric cars for free (zero down payment) and people can pay for that out of the savings on the petroleum products." The Indian government has experience with shifting consumer purchases toward more eco-friendly solutions, notably subsidizing the cost of LED light bulbs to replace incandescent bulbs. 

India, however, will face many challenges as a relatively large proportion of its large population lives in rural areas, many of whom do not have adequate electrical infrastructure for basic appliances. (For more, see: Tesla Issues $2 Billion Offering to Fund Model 3.)

The German Plan

The German government has pledged to reduce its CO2 emissions by 80–95% by the year 2050, and the goal to be an all electric vehicle nation by 2030 is part of that plan. 

Following Volkswagen's emissions scandal, Angela Merkel pledged subsidies for the purchase of electric cars, and German car maker Daimler recently announced an investment program to accelerate the adoption of electric cars. Secretary of Economy and Energy, Rainer Baake, has said that to meet the ambitious CO2 goals above, all newly registered vehicles would have to be electric by the year 2030 (although he did not claim this to be a mandate). 

The hope is to increase the number of electric cars on German roads from the current 0.6% to 8% by 2025 and increase that to 6 million vehicles by 2030.

The Bottom Line

India and Germany want to become all electric vehicle nations by 2030, just a little more than a decade away. Both countries will face challenges, but if they succeed it can set a worldwide precedent that will compel other nations to follow suit. This is bound to be good news for electric car makers like Tesla, and bad news for traditional automakers who don't keep up. It also may be negative in the long-run for oil companies as demand for their product wanes.

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