In an effort to speed up the development of electric cars in the country, German chancellor Angela Merkel's cabinet yesterday agreed on an ambitious plan to spend €500 million over the next three years to get a million electric cars on German roads by 2020 and possibly make the country the world's top market for zero-emissions vehicles.

Germany is home to the world's leading car brands like Daimler, BMW, Volkswagen and Porsche among others, who have all welcomed the plan, which will see the ailing German auto industry rush to get on to the electric car manufacturing bandwagon before other European and Japanese competitors enter the local market.

Currently, the plan envisages spending €500 million over the next three years on research and development of electric cars, programmes to boost battery technology and building of electric charging stations throughout the country.

Although Germany is a late entrant in electric car battery technology, the German government plans to spend €170 million into battery research, which will give the country's engineers exposure and training to this new technology.

Extra funds would be made available depending on the progress of the plan and modalities of securing the finance would be discussed in the next cabinet meeting.

Analysts say the German announcement is somewhat over ambitious  - global forecasting and market intelligence firm IHS Global Insight, has forecast that the global electric car production will grow from nearly 9,500 in 2009 to only about 58,000 in 2011.