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BMW Cuts Off Toyota, GM and Ford in California

Updated from 6:45 a.m. EST with Wahlman's response to reader questions. The response follows the end of the original article.

NEW YORK ( TheStreet) -- The most coveted prize for the California car buyer is the ability to drive solo in the carpool lane. There are two ways to do this:

1. Buy an all-electric or natural gas car. Let's say that you want to spend less than $35,000. Then your most available all-electric choices are Nissan LEAF and the Ford Focus Electric. The problem with these cars is that most people shun them because they are -- rightfully -- afraid of running out of electricity, and they may be stuck on the freeway. With only approximately 75 miles range, sales of these cars are bleak for a reason.

2. Buy a car that's electric for the first 6 to 38 miles, and then a gasoline engine kicks in to ensure that you can drive and refuel the car just like any conventional petrol car. This gets you some of the electric car benefits, but none of the "range anxiety" worry of the all-electric cars.

The cars in this latter category in the market today are General Motors' (GM - Get Report) Chevrolet Volt, the Toyota (TM - Get Report) Prius Plug-In, and two models from Ford (F - Get Report) just hitting the market now, called C-Max Energi and Fusion Energi. Net after-tax rebates, all of these cars sell for around $30,000. As evidenced by the 2012 sales data, this latter group of cars vastly outsell the all-electrics -- and sales are growing rapidly.

So what's the problem? Just buy the Volt, the Prius Plug-In, or any of the Fords, and drive alone in the California carpool lane! No?

Actually, while this will work just fine right now, this convenient party is coming to an end -- fast. You see, only 40,000 of these permits will be provided. The program only started recently, and by early October 2012 approximately 6,000 had been handed out. Now that Ford is entering the market this month, the pace should accelerate and I would be shocked if these permits don't dry up by the second half of 2013.

So what happens when these coveted 40,000 permits are exhausted? Will you then be forced to buy a potentially more expensive ($50,000 to $100,000) Tesla (TSLA - Get Report) Model S? Or will you live with range anxiety in a car that may only go 75 miles on a charge, with no back-up safety valve?

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