Essay: Electric Car

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[. . .] The price and demand for oil will also impact the alternative fuel industry, and just like the gulf oil spill, these are factors that are difficult to predict.

Global Influences

One unpredictable aspect of the 2020 outlook is how markets would be affected if more stringent and consistent legislation is adopted that supports specific technologies ("J.D. Power"). In particular, China has the ability to move quickly, invest heavily in the development of one specific propulsion technology, and mandate fuel economy or emissions standards that could favor a particular technology or require a minimum sales penetration level for vehicles with a designated technology ("J.D. Power"). Given the size and growth rate of the Chinese auto market, such a coordinated regulatory environment might allow Chinese companies to achieve economies of scale and drive down the cost of alternative-energy vehicles ("J.D. Power"). It stands to reason that if China was to choose an electric car as a preferred transportation method that automakers concerned about losing market share would move quickly to produce electric cars for the Chinese market. The same could be true if biofuels become a better technology favored by the Chinese government. It is very likely that global demand will account for the largest increase in the use and sale of electric and hybrid vehicles.

Consumer Opposition in the U.S.

Although Americans are increasingly environmentally conscious, it does not mean that the electric and hybrid car industry will not face challenges. As previously discussed one fear that keeps consumers at bay is range anxiety. Most EVs will travel 100 miles between charges, and even though statistics claim that most U.S. motorists drive less than 40 miles in their daily commutes, it is unclear whether consumers will accept the limitation (Motavalli). It may be that consumers will adjust to range limitations, but it remains a hurdle for selling electric cars in the U.S. market (Motavalli).

Although it isn't well-publicized, few battery EVs will be available nationwide from the outset due to concerns over demand (Motavalli). The Chevrolet Volt, which also has a gas engine, will be a national car, but the initial markets are California, Michigan and Washington, D.C. (Motavalli). Although the Nissan Leaf went on a 24-city national tour, the nationwide distribution is expected to take up to two years. This is mainly due to the lack of infrastructure in place to support a larger release.

The safety of electric vehicles has been widely published; however fear of electric shock (either when charging or when the car is in an accident) is still a concern for some consumers (Motavalli).

On the positive side, image is an important component of hybrid purchasing. The Toyota Prius set an interesting precedent, because its unique styling allowed it to catch on with car buyers who wanted a green image (Motavalli). A Prius in the driveway made a statement in a way that a Honda Civic Hybrid (with identical styling to the conventional Civic) did not (Motavalli). This is actually encouraging for EV sales, since almost all of them are distinctly styled -- some, such as the plane-like Aptera, radically so (Motavalli).

Tax credits for purchasing electric and hybrid vehicles are $7,500 for Federal taxes and some states also give tax credits. A separate Federal tax credit of $2,000 is available to help defer the cost of installing home charging units (Motavalli). The future of tax credits is uncertain in light of major budget deficits and spending cuts; however given the Obama Administration's huge investments in the electric and hybrid technologies, some form of tax credit is likely to remain available to consumers.

Electric Trucks

Electric and hybrid cars may be a hard sell to consumers, but electric trucks are more likely to secure a foothold with businesses. Freightliner Custom Chassis (CNG) is putting Tesla batteries in the electric trucks it will have on the road next year (Squatriglia). Freightliner has offered CNG and hybrid electric trucks for years and it's about to start selling a hydraulic hybrid, so electrics are the logical next step (Squatriglia).

Fleets are a perfect application for electric vehicles because they follow set routes, so range isn't a problem (Squatriglia). They're kept at centralized depots, making recharging easy and they're cheaper to operate, even though the upfront cost is higher (Squatriglia). Freightliner says its electric rig will save $15,000 a year in fuel and maintenance costs (Squatriglia). Ford recognizes the advantages of the electric trucks as well, and is set to introduce the light-duty Transit Connect Electric van at the end of 2010 (Squatriglia).

Big Oil Opposition

In his famed documentary "Who Killed The Electric Car?" director Chris Paine explores the reasons that GM's EV1 was produced and leased to consumers and subsequently declared a failure by GM due to lack of demand ( GM went on to collect and destroy a majority of the vehicles angering many owners and activists. The film was made in 2006 and questions the financial motives of GM and the oil industry in the ultimate removal of the EV1 from the market. Electric vehicles of all types and manufactures are springing up all over the world just ten years later; however it brings into question how the change to electric and hybrid vehicles could be opposed by big oil and what impact that could have on the industry.

Big oil could certainly use a makeover after the Gulf oil spill and publically, at least, oil conglomerates are embracing electric and hybrid vehicles in many ways including biofuels and as suppliers of raw materials for batteries. A123 Systems, a Massachusetts-based upstart in the electric vehicle battery industry recently made a deal to buy a key material for its lithium-ion cells and batteries from ConocoPhillips Specialty Products (Garthwaite). In April 2009, Conoco joined General Electric, CMEA, Qualcomm, Sequoia, MIT and others in a $69 million dollar financing round for A123 which launched a successful $378 million dollar IPO shortly thereafter (Garthwaite). The battery maker has now invested $23 million in Fisker, striking a deal to supply battery systems for the Fisker Karma and collaborate with the startup on its next-gen vehicle (Garthwaite). Big oil is destined to find the value in supporting alternative energy while still reaping the profits of higher oil demand in the short-term. Even as industrial nations make the move to electric vehicles, it will take decades before the necessary infrastructure and supply chains are in place. The other important factor for big oil is the fact that oil is a finite resource. In fact, it is predicted that oil production will peak in 2014, so oil companies are smart to consider diversifying their product offerings (Hsu).

III. Conclusion

Whether or not consumers will finally embrace the electric car remains to be seen, but it won't be for a lack of effort by policymakers. The environmentally friendly vehicle is making it way into the world in one form or another and technology will play the biggest role in making the electric car and hybrid car a viable alternative for the world's gas dependent citizens.


"Americans Using Less Energy Overall and Using More Renewable Energy Resources.", 24 Aug. 2010. Web. 17 Dec. 2010.

Garthwaite, Josei. "Hey, What's Big Oil Doing in That Electric Car?", Gigaom, 1 July 2010. Web. 17 Dec. 2010.

Hsu, Jeremy. "Peak oil production predicted for 2014.", March 12, 2010. Web. 17 Dec. 2010.

"J.D. Power forecasts hybrid- and battery-electric vehicles will represent 7.3% of global auto sales in 2020.", 28 Oct. 2010. Web. 16 Dec. 2010.

Kornblut, Anne E. And Peter Whoriskey. "Obama pours energy into electric-car batteries, but will it jump-start industry?" Washington Post. Washington Post, 16 July 2010. Web. 16 Dec. 2010.

"Major Study Concludes achieving EU 2050 transport decarbonization goals will require portfolio of advanced powertrains; fuel cells, battery-electric and plug-in hybrids.", 19 Nov. 2010. Web. 16 Dec. 2010.

Motavalli, Jim. "Seven Barriers to the Electric Car.", CBS Interactive, 17 March 2010. Web. 17 Dec 2010.

Squatriglia, Chuck. "Freightliner Taps Tesla… [END OF PREVIEW]

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APA Format

Electric Car.  (2010, December 17).  Retrieved July 19, 2019, from

MLA Format

"Electric Car."  17 December 2010.  Web.  19 July 2019. <>.

Chicago Format

"Electric Car."  December 17, 2010.  Accessed July 19, 2019.