Electric cars: 'Plug-ins' look for spark in 2012

John Gartner, lead EV analyst for Pike Research, a Boulder, Colo., market research company, is sticking by his prediction of three years ago that 2012 would be "make or break" for EVs. And while he, too, expects sales to fall short of automaker projections, they will be high enough.

"Despite a slower than expected start in EV sales, 2012 will likely see sufficient expansion in model selections and global availability of electrified vehicles to establish the category's permanency," Mr. Gartner writes. He expects 66,000 electric vehicles to be sold in the United States, more than a quarter million worldwide.

Permanency alone, much less 60,000 US sales, would be a big victory, even if sales are not on track to hit the "1 million plug-ins on US roads by 2015" target set by President Obama, says Bradley Berman, publisher of PluginCars.com.

"What this year will clearly show is that electric drive is a permanent category in the auto fleet," he says. "People who own these cars love driving them, despite a lot of naysaying from mainstream media. They're not dangerous, and they can satisfy the needs of the vast majority of drivers in terms of how far they go. And it's only going to get better."

What he means is that battery technology is improving and getting cheaper. But for now, plug-in owners are paying a hefty premium to be among the first to be able to avoid the gas pump altogether. A new Nissan LEAF owner will save $100 or more on gasoline a month at current prices. But at around $30,000 even after the federal $7,500 tax credit, it's still a lot of money for a hatchback. Surveys show consumers are willing to consider electric vehicles – but they want to pay in the low to mid-20s.

Electric vehicles also face a gale of bad publicity. The Volt endured a lab crash test last year, but weeks later the wreck caught fire because technicians didn't drain the battery system. It made hardly a dent for Volt enthusiasts. But in an election year, GOP congressmen jumped at the chance last month to hold hearings ostensibly on the safety of new electric vehicles promoted by the White House.

Some predicted a "Solyndra effect" following the bankruptcy in late January of Ener1, the parent company of Indianapolis-based electric car battery manufacturer EnerDel. The firm had spent $55 million of its $118 million Department of Energy grant.

"The bad publicity will hurt," says Mr. See. "The Chevy Volt fire was bad publicity and started a renewed interest in emphasizing the safety of batteries. It's not really fair to compare Ener1's failure to Solyndra ... but it will happen."

Even so, good things are happening for plug-ins. California announced last month it would require 15 percent of all cars sold in the state by 2025 to be zero emissions. That's a boost for plug-in or fuel-cell vehicles not only in the Golden State, but in other states that follow its air-quality rules.

Gasoline prices are rising, too, as the global economy improves and the summer "driving season" nears. "At current oil prices, electric vehicle sales will do just OK," says Lux's See. "But the equation definitely changes if gas prices go up."

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