President Barack Obama has said that, upon leaving office after his second term, he plans to buy an electric Chevy Volt.
But according to the Lundberg Survey, the price of a gallon of gas would need to rise to $12.50 before the Volt would be cost-effective for consumers. The reason: before government subsidies, the Chevy Volt costs roughly $40,000.
The Nissan Leaf fared little better. Gas would need to skyrocket to $8.53 a gallon in order for the Leaf to be economically competitive "based on the cost of gasoline versus electricity, fuel efficiency and depreciation."
Mr. Obama has set a goal of having one million electric battery-powered vehicles on American roads by 2015, but experts predict the actual number will be less than 200,000, due to low consumer demand. By 2017, Edmunds predicts "pure electric cars and plug-in hybrids to make up only 1.5 percent of the U.S. market in 2017, compared with 0.1 percent last year," a projection that, while lackluster, some experts believe is overly optimistic.
Still, Mr. Obama wants to raise the taxpayer-funded subsidies for electric vehicles from $7,500 to $10,000.
Beyond the consumer "rebates," taxpayers have seen millions of their dollars wasted in the form of federal grants:
Meanwhile, several companies have struggled due to lack of funding or customer troubles.
A123 Systems posted a wider-than-expected fourth-quarter loss this month after Fisker, one of its largest customers, cut battery orders. Bright Automotive, an Indiana electric commercial truck start-up, closed its doors in February after failing to get a federal loan.
Ener1 Inc, which received a $118.5 million federal grant to make lithium-ion batteries for EVs, filed for bankruptcy in January, and Aptera Motors, a California-based EV start-up, went out of business last December after it couldn't raise $80 million in private funding.
For these reasons and more, Bob Martin, a senior consultant to The CarLab, says the viability of electric cars remains largely a mirage: "It's been the Kool-Aid that the entire political system has been drinking for a decade. Electric cars are not ready for prime time. They're really interesting toys for very, very rich people."