Electric cars could help China and other countries reduce their dependency on oil but the government must provide incentive to make the shift, said Nissan and Renault CEO Carlos Ghosn.

He told an auto forum in Shanghai that car makers need backing as they respond to the growing consensus among consumers that zero-emission vehicles are necessary to cope with the environmental crisis.

He said: "With electric power, countries would no longer have to rely on one single commodity -- crude oil -- to supply all their transportation needs. For many countries that are net importers of crude oil, such as China, that is a strategic consideration."

Ghosn, who is also president of ACEA, said all major makers were investing in hybrid, clean diesel, electric cars.

He pointed out that the US, French and Japanese governments were already offering about USD7,500 to consumers who bought zero-emission cars and added: "The Chinese government is conscious of the fact that in order to promote electric cars they have to give something to the consumer, because there's no way electric cars are going to become mass marketed products unless you give something to the consumer." .

Chen Qingtai, a researcher for China's State Council Development Research Centre, told the forum that electric car development should be a priority for China, which was last year the world's second largest importer of oil.

He added that China's conventional car market was growing exponentially -- outpacing the US, with a record 10 million units sold in the first 10 months of 2009. "For the electric car industry it's opposite, currently we don't have economies of scale. If we increase the size of production, then the cost per unit will drop tremendously."

Chen agreed that the Chinese government should present a comprehensive package of incentives to promote the electric car industry, including rebates, requiring government agencies to buy more electric cars, tougher compulsory fuel efficiency standards and carbon dioxide consumption taxes.

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