Rebates available for first electric cars in Tenn.

By ERIK SCHELZIG

NASHVILLE, Tenn.

Gov. Phil Bredesen announced Wednesday that Tennessee will offer a $2,500 rebate on the first 1,000 electric vehicles sold in the state.

The Democratic governor announced the rebate program in a speech to a Tennessee Valley Authority forum in Nashville. The Tennessee rebate will be in addition to a $7,500 federal tax credit for electric vehicles.

"This it makes it just a little bit easier for Tennesseans to be pioneers in trying out electric cars and making them accessible and affordable in the state," Bredesen said.

Franklin-based Nissan North America Inc. is building a lithium-ion battery plant outside Nashville as part of a plan to build the Leaf, a five-passenger all-electric car. The plant is part of a $1.7 billion investment, most of it coming from a federal loan aimed at fostering energy independence.

The Leaf is scheduled to become available in Tennessee by the end of the year.

Bredesen said the $2.5 million for the rebate program will be drawn from the state's petroleum violation escrow account, which is collected from oil companies by the federal government. That money is limited to federally approved energy programs.

The state Revenue Department is teaming up with Nissan dealerships in Tennessee to offer the rebate when the Leaf is sold.

The rebate money is expected to run out before the Chevrolet Volt hits showroom, and the term-limited governor said he would leave it up to his successor to decide whether to extend of expand the program with the more than $7 million remaining in the fund.

Also appearing at the TVA forum Wednesday was U.S. Sen. Lamar Alexander, R-Tenn., who said his criticism of Democratic President Barack Obama's policies does not extend to the development of electric cars.

"I'm glad to support and applaud the president when he does things that I agree with and that I think are good for the country," he told The Associated Press before speaking at the forum. "I think he's doing that in many areas of education and he's doing it on electric cars."

Obama has pledged to bring 1 million plug-in hybrid electric vehicles to U.S. highways by 2015, and turned to the battery industry as one of the hallmarks of his economic recovery plan.

"Electric cars are the way to go," Alexander said. "It's the single best way to reduce our dependence on oil, especially foreign oil. After the Gulf spill, everyone is very aware of this."

Alexander inspected a Leaf and other electric cars on display outside the hotel where the TVA forum was held. The senator said he is in the process of buying a Leaf to drive in Washington, where he currently commutes in a hybrid Toyota Prius.