TechPulse 360

Electric cars should cost much less than gasoline-powered cars to operate. But higher sticker prices could mean government subsidies will be required to spark global sales, and Better Place’s battery swapping idea may be a non-starter.

These are some of the conclusions of a Pike Research report that examines the electric car industry from every which way and Sunday.

The firm projects that by 2015, the world will have 5.3 million recharging stations to plug in and re-energize. Still, electric cars and hybrids will represent only a tiny sliver of the auto market – about 2.5 percent.

Source: Pike Research

The report is among the first to comprehensively probe every aspect of the electric-car market and to publicly draw conclusions on the high-profile Better Place start-up. The high cost of equipment – $500,000 for a battery swapping and recharge station – will limited deployment and restrain the Silicon Valley company’s growth, the report finds. At the same time, car manufacturers will balk at the idea of designing battery systems to a Better Place standard, reducing the number of autos available.

More broadly, electric cars should appeal to consumers. The electricity necessary to operate a car will cost about 3 cents a mile, or well under the 13 cents or so it will cost to fuel a gasoline-powered car with gas at $3.00 a gallon.

Still, the costs of lithium-ion batteries will make the purchase prices of electrics higher and fuel an $8 billion battery industry by 2015. These initial costs will make 2012 a key year for the industry.

By then, most early adopters will have bought their vehicles. To take electric and hybrid vehicles to mainstream consumers, prices will have to fall or governments will have to step up with additional subsidies.

Pike finds that Asia will become the biggest consumer and producer of electric cars in the next five years. China and Japan are pushing automakers hard, with China targeting 500,000 vehicles a year.

U.S. carmakers are likely to play catch up again.

This entry was posted on Friday, December 18th, 2009 at 1:49 pm and is filed under news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.