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Japan ends subsidy program for green car purchases

Nikkei. Japan has decided to end a government subsidy program to encourage purchases of environmentally friendly cars as funds dwindle. According to the Ministry of Economy, Trade and Industry, the government only has ¥2.5 billion (US$32 million) left of the ¥274.7 billion (US$3.5 billion) allocated for the program.

The government revived the stimulus in a fourth supplementary budget for fiscal 2011 as many carmakers suffered disruptions to production and exports following the March 11 earthquake and tsunami, and flooding in Thailand.

The subsidy was supposed to be eligible for vehicles registered as new cars between Dec. 20, 2011 and Jan. 31, 2013, but it was recently estimated that the budget would dry up by the end of September.



This is very bad news. A few more cents per gallon on liquid fuels could finance this program for a few more years. Application could be updated to restrict subsidies to vehicles with 50+ or 60+ or even 70+ mpg to encourage manufacturers to do even better.

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