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Electric Cars: Do They Have Enough Market Muscle?

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/19/AR2008101902073.html

While oil prices can sometimes represent a game of Chutes and Ladders, the acceptance of the people on alternative fuel methods can often follow a similar pattern. As this Washington Post article on electric cars points out, the lack of permanent commitment and embrace by the public brings difficulties to creating a realistic transition away from fossil fuels and making a sustainable market for new vehicles and technologies. The struggle to change consumer behavior to favor and actually purchase the new vehicle model remains even with an energy crisis and oil dependence still present.

 

Its proponents say the electric car has transformative potential that other transportation alternatives lack. "We want customers to see the Volt as the game changer it is, not only for the technology, but also for business, and maybe more importantly for the way the world drives," said Troy A. Clarke, president of GM North America.

 

"Reducing our oil dependency meaningfully in the U.S., under any scenario, requires radically improving the efficiency of our vehicles," says Saurin D. Shah, a vice president at investment firm Neuberger Berman who expects an explosion of hybrid and plug-in cars by 2030. He predicts hybrid and electric cars will replace conventional vehicles as swiftly as electric locomotives replaced steam-driven ones.

 

But because their batteries are expensive, plug-in cars are going to cost as much as $8,000 more than conventional gasoline cars. The lower the price of gasoline, the longer it is going to take for fuel savings to make up for the car purchase premium. That is one reason why Democratic presidential candidate Sen. Barack Obama (Ill.) has proposed a $7,000 tax credit for consumers who buy electric cars. Republican presidential hopeful Sen. John McCain (Ariz.) favors a $5,000 tax credit for cars with ultra-low emissions.

While government subsidies, grants, and private sector financing can help provide financial support for the development of the electric car industry, it does not sell them. It appears that a majority of drivers are still unwilling to transition away from their beloved Hummer H2 because of the lack of understanding of how an electric vehicle is maintained and the lack of infrastructure currently in place to support it. Combined with an economic existential crisis, there is even less spending or business development across the board, causing an even greater hill for electric car proponents to climb.

 

Washington Post; October 20, 2008

 

Submitted by K. Rutherford

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This page contains a single entry published on October 20, 2008 3:49 PM.

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