Everyone knows that electric cars will eventually lead the auto market, sooner or later, it all depends on the money put into the R&D of batteries. Michigan, once a prosperous area for the auto industry, saw a decline once the economy collapsed. Now, because of government incentives through grants under the Recovery Act, nine electric car battery factories have reborn there, creating new jobs and putting things on track again.
The problem is that nine battery factories are a little too many for the electric cars’ predicted success, at least for the moment. Menahem Anderman, the founder of Total Battery Consulting, analyzing the market, says that less than 100,000 electric cars will be sold in the U.S. by 2014, when the battery factories will be in their full operational state, although the grants through the Recovery Act will lower the prices by 70 percent and support the production of 500,000 EVs a year.
“One of the challenges for the industry right now is not overbuilding capacity,” says Michael Andrew, director of government affairs at Milwaukee-based Johnson Controls, which received the largest of the battery-factory grants. A wave of purchases from early adopters will help, but to sustain demand, he says, Johnson Controls is working to educate the public about electric vehicles and hybrids.
A123 systems, another main battery manufacturer from Livonia, MI, through Andy Chu, its marketing VP, says he already has covered the production with enough orders to keep its existence justified.
All these people can do right now is sit back and wait their results to go onto the market and the car manufacturers to create orders based on consumer demand. Like it was the case with GM, who retracted and then destroyed its entire EV1 electric car fleet off the market, the first predictions are pessimistic, although there are a lot of people swearing they would buy and electric car.