No pollutants, no tax by Assaf Bar-Shai October 23, 2005 http://www.haaretz.com/hasen/spages/636985.html More and more cars are crowding Israel's roads, just like elsewhere in the world, creating progressively more air pollution. While most automotive manufacturers repeatedly report that their cars are polluting less and operating more fuel efficiently, the truth is very little has been done in the matter. On this level, today's cars are not dramatically ahead of those at the beginning of the 20th century, when the number of cars worldwide was similar to those found in a typical 2005 Tel Aviv neighborhood. Still, there are a few, primarily small manufacturers, producing electric vehicles (EV). Among their numerous disadvantages are short travel range, limited performance, weighty batteries and high price. Ford abandoned a few years back its ambitious electric Think car project, which had offered the EV as a practical urban solution. Lately, Arava, a local company, has tried to introduce the Indian EV Reva. Company CEO Rafael Ben Yosef recently complained that the Transportation Ministry was dragging its feet, and he feared that after taxation, the tiny car would be too expensive to attract the Israeli public. Senior deputy director general for planning and finance at the Tax Authority, Boaz Sofer, who is responsible for car taxation, said that the treasury is interested in promoting environmentally- friendly vehicle imports. "Zero pollutants equals zero taxes," Sofer says. "Whoever brings a car that doesn't pollute into Israel will be awarded full exemption from the purchase tax." Sofer already took his first step by promoting the reduction of purchase tax on the Toyota hybrid Prius, from the regular 95 percent rate to 40 percent. On the other hand, Sofer opposes reducing the tax to 10 percent, as several Knesset members have demanded. "This car pollutes less than others, but it still pollutes," Sofer says. Hybrids integrate two engine types, neither of which is usually electric. In the case of the Prius, one engine runs on gasoline, the other on electricity. The electric engine runs the car as much as possible, while the gasoline one assists when electric power is insufficient. The electric engine recharges when the car is breaking or using the gasoline engine. By reducing air and noise pollution, the Prius is more environmentally friendly than the average car. But that does not mean that every hybrid is environmentally friendly. The trend toward hybrids is growing, but while their mode of operation, for example, that of the Lexus RX4000, makes better than their counterparts, they still generate more pollution than most vehicles. Plus, their large size makes them hazardous to the environment. Sofer hints that these hybrids would not necessarily enjoy tax reductions. It appears that closer cooperation between the Finance and Transportation Ministries will be necessary in order to ramp up environmentally friendly vehicle imports. Regardless, whoever brings in electric cars is likely to find an excellent business opportunity. And Israeli citizens, along with anyone who breathes the local air, for sure will not object.