Is There Already a Growing Electric Car Bubble?

“There is a strong possibility of an EV glut,” he said, pointing to larger demand for the cars from government and environmental groups than from consumers. “As much as we all want clean air for ourselves and our children, when gas is cheap we tend to buy large vehicles without too much concern for the environment.”

Omotoso has a point. The only time people truly expressed a panicked interest in more fuel-efficient vehicles was when gas hit $4 a gallon. Over the next five to 10 years, automakers will introduce a number of electric and plug-in hybrid vehicles that will have hefty price tags (if the Chevy Volt’s probable $40,000 cost is any indication).

Without higher fuel prices, the economic sense of these vehicles becomes questionable, no matter their effect on air quality or carbon emissions. Ford chairman Bill Ford has said publicly that automakers’ ability to forecast market swings has “just been terrible.” That’s why Ford and others have strongly advocated some form of gas tax to make sure a market exists for EVs when they hit dealerships.

Even with government help, EV capacity may outstrip demand, especially if no one can figure out how to bring the sticker price down. In the end, the number of expensive electric vehicles automakers are trying to get to market may be overwhelming compared to the number of people who can actually afford to buy one.

Electric Car Glut on the Way? (Earth2Tech)