(Source: Business Week)
They're finally for real. Plug-in electric vehicles are no longer consigned to the imaginations of the environmentally minded or fuel-price-shocked motorists. Since the beginning of this decade, innovations in lithium ion batteries and the materials used to make them have increased the range of electric cars and decreased the time needed for a recharge. Increased green awareness and the unpredictable behavior of oil prices are driving investment in electric car technology as never before.
Until now, all-electric vehicles have been a niche. A few tens of thousands are in use in municipal and university fleets, and several limited-edition luxury roadsters are available from upstarts such as Tesla and Venturi. Now that the vehicles themselves are reaching greater technical maturity, the biggest remaining hurdle is to create an infrastructure for recharging them on the go. Analysts caution that a widespread network of charge points remains many years away.
Upsurge in Europe The problem isn't lack of opportunity. A recent study from researcher Frost & Sullivan forecasts that by 2015, Europe alone will see 250,000 all-electric vehicles on the roads. By then, the technology and marketing of electric vehicles will be such that sedans, family vans, and sports cars all will join the repertoire of available models. Major auto manufacturers in Europe, the U.S., and Asia are now teaming up with electronics companies to get these vehicles rolling. "Every day, there is another investor looking to get in on this," says Anjan Kumar, an India-based researcher who authored the Frost & Sullivan report.
Yet no matter how fast and long-running electric cars may become, sales won't take off unless a recharging infrastructure grows in tandem. It's a classic chicken-or-egg dilemma: Utilities won't invest in charge points if there aren't enough cars, but consumers won't buy vehicles until they have ample places to "fill up." The needed infrastructure also will be hugely expensive to build and put new stresses on the electrical grid. "It's going to be a drain on the system," says Stephanie Brinley, an analyst at market researcher AutoPacific.
Fortunately, automakers and utilities are talking a lot more than they did a decade ago, Brinley says. But discussions won't turn into concrete plans until there are profits to be made -- something she warns is still years off. "Hybrids have been around for 10 years, and they're still not profitable," she notes.
Boon for Cities The only path forward is gradually to bootstrap fleets and recharging networks. A handful of European cities are exploring this approach by setting up charge points and testing fleets of all-electric vehicles.
