Electric Cars Gain Momentum as Gas Prices Rise

The automotive industry is shifting towards electric and hybrid vehicles as gas prices creep upward, with carmakers announcing plans for electrics, plug-in hybrids, and extended-range electric cars. Chrysler, Ford, and General Motors are among those planning to release new electric models, with some already slated for release in 2012. Despite the growing interest in electrics, experts warn that high costs of lithium-ion batteries will limit their appeal for the next decade, with only early adopters expected to buy them. However, plug-in hybrids and extended-range electrics may have wider appeal, accounting for 150,000 sales in 2016.

Key Takeaways:

• Chrysler plans to release an electric version of the Fiat 500 in 2012, a year after the gasoline-powered model is released.
• Ford is preparing to release an electric version of its Transit Connect small van in late 2010, with General Motors planning to start selling its Chevrolet Volt extended-range electric car around the same time.
• Toyota is field testing the plug-in Prius hybrid it plans to release in 2012, while Nissan is preparing to announce prices for its Leaf electric car, which is due in November.
• Experts warn that high costs of lithium-ion batteries will limit the appeal of pure electrics, with only 50,000 expected to be sold in 2016.
• Plug-in hybrids and extended-range electrics, like the Chevrolet Volt, may have wider appeal, with 150,000 expected to be sold in 2016.
• The estimated cost of lithium-ion batteries is $5,000 to $6,000, which is about half the cost of nickel metal hydride batteries used in most hybrids.
• Chrysler plans to build the electric Fiat 500 in Mexico, with production starting in 2012.

Statistics:

• 16 million new cars and trucks are expected to be sold in the US in 2016.
• Only 50,000 pure electrics are expected to be sold in the US in 2016.
• 150,000 plug-in hybrids and extended-range electrics are expected to be sold in the US in 2016.
• The estimated cost of lithium-ion batteries is $5,000 to $6,000.
• The Chevrolet Volt will have a gasoline engine to recharge its batteries.

Sources:

• Newsday, "Chrysler to introduce an electric Fiat 500", March 2010.
• J.D. Power and Associates, "Global Powertrains for Auto Market Researchers".
• Chrysler, announcement on electric Fiat 500, January 2010.
• Newsday, "Car prices creep upward, experts warn of higher fuel costs", March 2010.
• Toyota, announcement on plug-in Prius hybrid, March 2010.
• Nissan, announcement on Leaf electric car, November 2010.