San Francisco cars to go electric

California rounded off a week of environmental reforms yesterday, by announcing plans for a new $1bn (£675m) infrastructure in the San Francisco bay area to support a huge fleet of electric cars.

They hope the scheme will put the area at the forefront of an electric car revolution and create wealth and jobs for local industry.

Governor Arnold Schwarzenegger said the plans are the first of their type in the US.

"This partnership is proof that by working together we can achieve our goals of creating a healthier planet while boosting our economy at the same time," he said.

The plans are the first venture into the US of Project Better Place, a company set up to run electric infrastructure networks that has already reached agreements in Israel, Denmark and Australia this year for similar projects.

The scheme involves a number of proposals to encourage the adoption of electric vehicles including speeding up the installation of charging outlets on streets and in homes, and offering incentives for companies to install charging stations in the workplace.

Gavin Newsom, mayor of San Francisco, said that creating the infrastructure to encourage purchases of electric cars would help to make the region "the electric vehicle capital in the US". He and the mayors of the region’s other big cities, Oakland and San Jose, set out plans to facilitate the new network.

Better Place expects to spend $250m by 2012 on building the infrastructure needed to support a fleet of electric cars.

Backers of the plan hope to capitalise on Californians' passion for the environment – more than half of all Toyota’s Prius hybrid vehicles in the US have been sold in the state.

However, with petrol prices halving in recent weeks as oil prices have dropped, the short-term economic impetus for consumers – and car manufacturers – to switch to electric has fallen.

Shai Agassi, founder and chief executive of Better Place said: "We're looking at the long-term problem of oil prices."

He also predicted that prices would rise again by 2012.