VZCZCXRO4588
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #0171/01 0481712
ZNR UUUUU ZZH
R 171712Z FEB 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 0228
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3823
RHEHNSC/NSC WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 MADRID 000171 
 
SIPDIS 
 
SENSITIVE 
 
STATE - EUR/WE, EEB/ESC/IEC, OES/PCI 
DOE - PIA:KBALLOU; EERE:DBIRNS,JTENG; SCIENCE OFFICE 
DOC - 6110/ITA; MAS/ENERGY; 4212/D.CALVERT; AUTO./A.PARRIS 
 
E.O. 12958:  N/A 
TAGS: EFIN ENRG PREL SENV SP
SUBJECT:  GOS SEEKS TO PROMOTE ELECTRIC VEHICLES, WOULD WELCOME USG 
COOPERATION 
 
REF:  (A)MADRID 111, (B)08 MADRID 1309 
 
MADRID 00000171  001.2 OF 002 
 
 
1.(U) Summary: Industry Minister Sebastian has set a goal of getting 
a million electric or hybrid vehicles on the road by 2014.  A 
demonstration project will put 2,000 electric vehicles on the road 
in 2009-10 in city government fleets and corporate fleets. 
Separately, Sebastian's ministry is talking with Renault about 
manufacturing tens of thousands of electric vehicles in the 
company's existing Spanish plants starting in 2011.  It also is 
talking with Nissan, though these conversations are less advanced. 
The only U.S. companies so far involved in Spain-related electric 
vehicles discussions are the California firm Better Place and 
General Motors Europe, which are working on charging infrastructure 
issues.  GOS officials appear to be open to working with the USG or 
U.S. firms, and there is political-level interest in cooperation 
with the USG.   Minister Sebastian's March 18 visit to Washington 
provides an excellent opportunity to engage the key GOS player on 
electric vehicle issues.  End Summary. 
 
Demonstration Project to Put 2,000 on Road in 2009-10 
 
2.(SBU) Soon after taking office last year, Industry, Tourism, and 
Commerce Minister Miguel Sebastian established an ambitious goal of 
having a million electric or hybrid vehicles on the road in Spain by 
¶2014.  The GOS is moving on two main fronts: a demonstration project 
to put 2,000 fully electric vehicles on the road in three cities in 
2009-10, and ongoing talks with Renault and Nissan to encourage 
manufacturing of electric vehicles at existing auto plants.  The 
demonstration project ("MOVELE") is being developed by the 
Ministry's Institute for Energy Diversification and Saving (IDAE). 
IDAE will spend 8 million euros towards the cost of vehicles for 
municipal government fleets and corporate fleets in three cities. 
IDAE is expected to announce sometime in February which municipal 
governments' proposals have been accepted.  (Madrid and Barcelona, 
the country's two largest cities, appear to be frontrunners.) 
Another 1.5 million euros will go towards charging infrastructure, 
and half a million will be used for management, communication, and 
technical assistance.  While one advantage of using fleets is that 
recharging can be done at a relatively small number of central fleet 
garages, IDAE plans to have some charging stations on main roads to 
increase visibility of the project.   IDAE is talking with a number 
of electric vehicle manufacturers, including Mitsubishi and the 
Norwegian firm Think, and expects to make purchases from more than 
one.  This will be necessary because of the manufacturers' limited 
production capacity, but it also will provide flexibility to the 
various vehicle recipients. 
 
Aiming for Manufacturing in Existing Plants in 2011 
 
3.(SBU) Collapsing sales and large-scale layoffs in Spain's auto 
industry, which was the world's eighth largest in 2007, have sparked 
GOS interest in promoting electric vehicle manufacturing as a way to 
keep (foreign-owned) plants open.  Last year, after Renault 
announced plans to lay off thousands of workers at its four Spanish 
plants and said it was considering reducing capacity, the GOS and 
Renault created working groups to look at three issues related to 
electric vehicles: manufacturing, charging infrastructure, and 
promotion of consumer demand.   The two sides have discussed 
significant per-vehicle subsidies and hope Renault would build at 
its Valladolid plant and possibly elsewhere one or two of the four 
electric models it envisions.  The aim is to begin production of 
relatively small volumes -- ten to fifty thousand vehicles per year 
-- in 2011.  The two sides also are discussing a possible battery 
manufacturing plant.  Charging infrastructure discussions have 
included Spanish electricity companies Endesa and Iberdrola and 
(separately) the California company Better Place, which has a 
partnership with Renault and Nissan to construct a nationwide 
recharging infrastructure in Israel.   The GOS is talking separately 
with Nissan, which also has announced large-scale layoffs in its 
Spanish operation.  NEC, which would provide batteries, is also 
involved in the Nissan talks, which are not as advanced as those 
with Renault.  (Comment: A Ministry official with whom post spoke 
did not know whether French President Sarkozy's remarks last week 
critical of French companies' vehicle production outside of France 
would affect Renault's interest in producing electric vehicles in 
Spain.  End Comment.) 
 
4.(U) In an unrelated effort, Iberdrola and General Motors Europe 
agreed last December to study the needs for recharging stations for 
electric vehicles in homes, offices, and parking facilities.  The 
study (see Ref B) is being conducted in Spain and the U.K. 
 
 
MADRID 00000171  002.2 OF 002 
 
 
Implications for the U.S. 
 
5.(SBU) We see several implications for the U.S. and U.S. companies. 
 The goal of putting a million electric vehicles or hybrids on the 
road by 2014 may provide opportunities for U.S. manufacturers of 
autos, batteries, and charging infrastructure.  For example, Carlos 
Redondo, Minister Sebastian's advisor on automotive issues, 
expressed interest in the Chevrolet Volt project.  However, Redondo 
comes from the automotive/industrial side of the ministry rather 
than the energy/efficiency side and appears to be interested in 
electric vehicles mainly as a way to keep open troubled Spanish auto 
plants.  If other Ministry officials share this view, we will need 
to work with the GOS to ensure that Spanish production and purchase 
incentives are WTO-consistent and do not place American-produced 
vehicles at an unfair disadvantage. 
 
6.(SBU) If the USG is interested in cooperating with the GOS on any 
aspect of electric vehicles, the GOS likely would be receptive at 
the political level.  President Zapatero's chief economic adviser 
and a staffer told EEB acting A/S Nelson last month (Ref A) that 
electric vehicles were one of the areas in which the GOS would like 
to cooperate with the new U.S. Administration.  They did not provide 
details, and we believe even the technical-level experts, while 
welcoming the idea of cooperation, do not have specific projects in 
mind.  As the new Administration develops its efforts to promote 
development of electric vehicles, post encourages Washington 
officials to consider whether cooperation in this area with Spain 
could advance our interests. 
 
Minister Sebastian's Visit to Washington 
 
7.(SBU) Minister Sebastian will visit Washington March 18 after 
visiting New York March 16-17.  He is seeking meetings at USTR, 
Commerce, and Energy.  If there is any USG interest in working with 
the GOS to promote electric vehicles, these meetings would be an 
excellent opportunity to engage the most important GOS official on 
this issue. 
CHACON