Every day, we hear about new plans for hybrid, plug-in or full-on electric vehicles. The Toyota Prius remains a hot seller. The Chevy Volt is showing promising sales, while the Nissan Leaf is receiving rave reviews.
Now Ford has announced that one-quarter of its cars will have an electric motor by 2013, as it triples production.
It feels like nearly every vehicle has a hybrid version now. Many hybrid vehicles have all-electric versions in the works. Judging by the hype, it feels like the plan-old gas-powered engine is going the way of the dodo.
Is that really the case, though?
The short answer: No. Not by a longshot.
To take one snapshot -- in January 2011, there were over 816,000 cars sold in America.
Of that number, a bit under 20,000 were hybrid vehicles. Toyota sold just north of 10,000 Prius. Honda sold a little over 1,500 Insights. Every other hybrid vehicle was in triple, double or -- often -- single digits.
That makes hybrids a mere 2.4% of the automotive market.
Why go back to January? Simple -- February was a short month, and the numbers since then have dropped precipitously, as Japan's earthquake severely damaged supply lines. Hybrid vehicles made up a mere 1.54% of sales in May.
Plug-ins, even as sales rose 344% April to May, only made up 0.15% of new-car purchases last month.
The news is full of electric vehicle talk, and, listening to marketing, you'd think hybrid vehicles are taking over the roads. The facts on the ground, however, are much different.
That's not to say that electric vehicles don't have a bright future. With oil becoming scarcer and the general trend toward higher gas prices, there's a fair chance that, sometime in the future, the majority of vehicles on the road will be electric.
Just don't be confused -- that day remains far away. There are a number of reasons for this.
1. There isn't an electric vehicle infrastructure. Google, on its California campus, believes it has the most extensive charging infrastructure in America. Good for Google -- bad news for the rest of the nation.
Florida is making headlines every time it installs a new charging station in Del Ray or Palm Beach. There simply isn't any way for the majority of Americans to "refill" electric vehicles on the road -- or, for that matter, at home. If you rent, forget about charging stations at home. If you own a condo with a garage, chances are very good there's nowhere for you to pump up. And if you have street parking -- good luck finding a nearby plug.
Even homeowners with garages on the grid usually have the wrong sort of current for charging electric vehicles. It will be years before electric vehicles are a practical choice for the majority of Americans.
2. There isn't enough range. The best electric vehicles top out at around 100 miles. True -- that may be enough for the majority of car trips. But it certainly isn't enough for every trip -- and it isn't enough to leap from one (still non-existent) charging station to another.
That is all right if you are a city dweller and your electric vehicles is your commuter car. But, if you can't afford a second car, you're going to be sure the one you buy will get you everywhere you need to go. That still means gas.
3. The numbers don't add up. electric vehicles are quite expensive. Gas -- while expensive compared to years past -- still remains the cheaper option, when you factor in the difference in the initial cost of your car.
That may change fast -- as gas continues to rise long-term, and economies of scale are built around electric vehicles, owning an electric may be the cheaper option sooner than you think. Just not today.
(Don't forget, you can sign up for Taipan Daily to receive all of regualr editors Justice Litle and Joseph McBrennan's investment commentary.)
There's progress being made on all these fronts. Streaming batteries may be the solution for infrastructure. Today, there are tests being conducted in Israel where electric vehicless don't need to charge -- you just pull up to a station and swap out your depleted battery for a full one. If that technology catches on, building out the infrastructure could happen a lot faster than anyone has predicted.
Likewise, MIT researchers think they've stumbled upon a goldmine they've dubbed "Cambridge Crude." It's a black goo, somewhat similar in appearance to oil, that could be pumped into batteries much the same way gas is pumped into tanks. The goo could halve the weight and cost of batteries as well -- greatly extending range and decreasing price.
But, right now, these advances are years away from real production. Keep your eye on electric vehicles -- just remember, they occupy a few niche markets (like city meter maids, or luxury status symbols). It's going to be years before they are a viable option for the average city dweller, and years again before they make sense for anyone living outside a major metropolis.
When hybrid vehicles have fallen in price -- or gas has gone up enough -- that 25% of new vehicles do indeed have an electric engine, then we'll talk.
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Steel, copper, coal, gas and oil made the Industrial Revolution possible. But this is no longer the age of steel and oil. Welcome to the Age of "Technology Metals!"
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