Last month, Chinese media reported that Beijing officials would soon begin taking more than a quarter of a million cars off the road in an effort to ease traffic congestion and heavy pollution. Basically, the plan called for banning high-polluting cars from the roads at least one day a week. Those caught driving high-polluting vehicles within the city's Fifth Ring Road would be fined about $15. The plan also included $3,600 for drivers that offered to give up their cars in 2009.

Well, this week, Beijing took it one step further by announcing that the government may begin offering cash rebates to buyers of alternative energy cars and buses in 13 major cities - including Beijing and Shanghai. These rebates would run from as little as US$7,300 for small hybrid passenger cars to as much as US$87,000 for large, fuel cell-powered commercial buses.

There has been no indication as to when this program would begin, but the rebates would be available for battery, hybrid and fuel cell powered cars. While fuel cell powered cars are an excellent distraction from progress, and about as realistic (at least within the next 20 years) as Loompa Land, a new generation of hybrid, plug-in hybrid electric, and all-electric vehicles are now in the earliest stages of production. In fact, BYD Company (HK:1211) has just recently launched its first mass-produced electric car in China. Delivering about 60 miles on one charge, and with a top speed of about 100 mph, it is likely that BYD's vehicles will now become even more attractive to consumers in the Middle Kingdom.

Jeff