Prospects for Electric Vehicles

Abstract

The transformation from conventional vehicles to electric vehicles is underway, but its timeline is still uncertain. The battle against climate change provides the essential backdrop, leading governments to encourage this transformation by providing both consumer incentives to purchase electric vehicles and by establishing regulations requiring automakers to produce them. Behind this prodding are a set of fundamental forces that both encourage and discourage consumer interest, as set forth in the text. Fortunately, intensive battery research and development is proceeding that should alter market forces and make electric vehicles more attractive to segments of the population not now in the market for an electric vehicle. Hence, even if the timeline for battery improvement cannot be predicted with certainty, continued government support, and upstart automakers, such as Tesla, should ensure that the transformation will proceed over time.