Aug. 19 (Bloomberg) -- Chancellor Angela Merkel’s cabinet approved steps to promote electric-car technology with the goal of putting 1 million vehicles on German roads by 2020, aiming to make the home of Volkswagen AG and Daimler AG a world leader in transportation alternatives.

Merkel’s ruling coalition parties, in a rare show of unity five weeks before Germany’s national elections, are pledging to spend 500 million euros ($705 million) by 2011 on developing electric vehicles, according to the “national development plan on electric mobility” seen by Bloomberg News.

“We’re facing a paradigm change in the automobile industry,” Transport Minister Wolfgang Tiefensee said at a news conference in Berlin today. “It’s our goal to reduce energy consumption and explore new energy sources if Germany wants to keep its place in the world as environmental leader.”

Merkel’s coalition government is aiming to slash greenhouse-gas emissions by as much as 40 percent by 2020 in a program that includes increasing the share of electricity from renewable sources to as much as 30 percent from 12 percent.

Tiefensee’s Social Democrats passed legislation in 2002 while in a coalition with the Green Party to phase out nuclear power by about 2021. Merkel’s Christian Democrats, locked into a coalition with the Social Democrats since 2005, have sought to prolong the life of reactors.

‘An Efficient Infrastructure’

The electric-mobility program aims to build on Germany’s automotive expertise when setting up “an efficient infrastructure” for electric cars, with a goal of more than 5 million electric vehicles by 2030, according to the 53-page document.

Germany’s major automakers are developing platforms for electric vehicles and won’t be able to roll out models until 2011, said Economy Minister Karl Theodor zu Guttenberg, a member of the Christian Social Union, the sister party of Merkel’s Christian Democrats, at the news conference.

“One million cars by 2020 is an ambitious but entirely achievable goal,” Guttenberg said. “We’re taking steps to ensure that Germany’s automobile industry will preserve its leading role, that’s why progress in this area is important.”

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net.

Last Updated: August 19, 2009 07:25 EDT