Sunday, June 21, 2009

Odds Keep Improving For Electric Cars

If personal cars are to move from gasoline to an alternative — hydrogen, compressed natural gas, batteries or something else — they’ll need new infrastructure to match today’s gas stations. It’s the chicken-and-egg problem of the transportation industry. Without a way to refuel, why would anyone switch away from standard combustion engine vehicles?

The onus is thus put on investors to build or buy infrastructure, in hopes that once they do, the people will come. Now it’s starting to look like some investors are ready to take the risk, including some not known for risky behavior. One example: A small company called Coulomb Technologies is projecting higher-than-expected sales targets for its electric car charging stations, according the the New York Times.

Coulomb says it’ll be profitable by next year, based on the sales of thousands of its slow-charge kiosks. Cities, condo owners and others are looking for a way to get a jump on what looks like a promising market, with the approaching introduction of plug-in hybrids like the Chevy Volt and the all-electric Coda from Miles Electric.

Such purchases are a risk, because there’s no guarantee that sales of the vehicles will take off — electrics and hybrids tend to be expensive even for affluent places like California’s Bay Area, where many of the first charging stations will go. Building up volume sales of vehicles that are starting in the $40,000 and above range may take years, or not happen at all if prices don’t come down. But the important thing for now is that the infrastructure is being built in, by Coulomb as well as others like Better Place and GreenlightAC.

The good news for electric cars doesn’t stop there. Despite the urging of oil and gas baron T. Boone Pickens, it seems compressed natural gas vehicles aren’t going to take off. And on the hydrogen side, it looks like General Motors might be ready to cut funding for its fuel cell program, says Gas 2.0. Of course, other companies including Toyota are also working on fuel cells, but it takes more than one to make a party.

Consumers, for their part, will be happier making purchases of electrics and hybrids if they feel confident that the rest of the world is moving the same way. Building a new market is always one part business, one part psychology. The sight of gleaming new charging kiosks should help a great deal with the latter.

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