The Obama and Bush administrations saved General Motors from bankruptcy, and now as the company prepares to partially denationalize, the government will help once again to reduce the price of its upcoming EV.  For every one of its 2011 Chevy Volt electric vehicles sold, the government will give qualifying buyers a $7,500 USD tax credit (this also applies to vehicles like the Nissan Leaf).  This helps GM and its competitors to offer a more competitive price (after tax credit) and makes the vehicles potentially profitable for the company.

Critics of the tax credit, rolled out under President Bush's leadership, will likely be even more infuriated with pending proposals to bump the tax credit to as high as $10,000 USD.

For all its fortune in the U.S., GM is finding resistance to its push for government assistance in China.  China, looking to support local EV efforts, has thus far rebuffed GM's urging to adopt a level tax credit for Chinese EV buyers.  GM, which reportedly sold more cars in China last year than the U.S., is currently deciding whether to scrap plans to build a series of EV charging stations in China's urban areas.

GM China VP David Chen complains,"China is the only country that has different subsidy policies [for electric vehicles based on origin].  The U.S. government provides US$7,500 for every electric car no matter where it comes from."

As a result, the Chevy Volt is anticipated to be priced at over $40,000 USD after any applicable tax credits when it launches later this year.  This will be drastically more expensive the domestic hybrids produced by Chinese rivals.

China, no stranger to market regulation itself, recently announced an ambitious plan spend 100 billion yuan ($14.7B USD) to fund its domestic automakers.

At the moment, any EV sold in the U.S. (regardless of the country of origin) can get full tax credits.  In China, though, U.S. EVs receive unequal treatment.  

Even Japan, which long blocked auto imports from the U.S., recently caved in and offered a whopping 3.24 million yen (roughly $38,000 USD) tax rebate for those who buy Tesla Roadster EVs.  The Roadster, a luxury competitor to the Volt, currently retails for 12.8 million yen (roughly $149,200 USD) in Japan.

IHS Automotive analyst to Green Car Advisor writes, "Although the government is looking to increase the numbers of such vehicles sold in the country, it is aiming to maintain the stranglehold of locally built vehicles, and this is unlikely to change."

China's EV dominance isn't merely limited to domestic assembly, though.  The growing giant also maintains a tight grip on around 95 percent of the world's rare earth metal production.  EVs and hybrid vehicles use much more rare earth metals then standard vehicles.  And it takes years to create active mines and processing facilities for rare earth metals.  Thus, to some extent, China will be able to dictate the price of EVs and hybrids internationally.