Will Electric Cars Catch On?

Currently, the U.S. government has a sort of 'if you build them, they will come' attitude towards electric vehicles. Just yesterday, the President appeared at the opening of a new electric battery plant in Michigan, which benefitted from stimulus funds. Electric cars also qualify for generous tax rebates up to $7,500. Yet, an article in the Wall Street Journal argues that consumers in the U.S. might not be quick to embrace electronic cars. Is the government making a poor bet?

Here's the WSJ explaining a major obstacle:

Proponents of the technology will tell you that anyone buying an electric vehicle will want to know at least two things: How far can I drive before I have to recharge? And, where can I go to recharge when I am on the road, far from home? Companies acknowledge that clear answers to those questions aren't yet available--and may not be until a good while after the coming flock of electric cars has hit showrooms.

Of course, there are other obstacles as well. Americans have developed an appetite for giant, fast cars. Most electronic vehicles are on the small side and don't have the same zip. It isn't easy to change cultural norms. So is the industry doomed, despite the government assistance?

Not necessarily. In fact, as far as we can tell, there's definitely some demand for electric cars already. In May, we learned that the all-electric Nissan Leaf sold out its pre-orders in just over one month. That was only 13,000 reservations, but no automaker had mass-marketed an all electric vehicle in the U.S., so this was a significant step.

The lack of charging stations is likely to be a significant obstacle at first. But this sort of problem isn't unique to electric cars. Indeed, gas-powered cars likely faced the same problem when they were introduced -- gas stations were probably as sparse as charging stations will be. More recently, mobile phones initially lacked the widespread signal towers to allow those who owned the devices to use them everywhere. But as these new technologies gained popularity, these problems work themselves out.

That's not to say that every American will necessarily have an electric cars in their driveway in a decade, or even in two. If gas prices manage to stay relatively low, then Americans may have a tough time giving up their relatively inexpensive sports cars and SUVs. Indeed, the uncertainty ahead is precisely why the government shouldn't be picking winners. But it's certainly possible that electric cars could be a huge success. Consumers are often slow to embrace new innovation. Battery-powered vehicles might have a bumpy road ahead, but it's not obviously bumpier than the road new technology generally must travel on to reach success.