Can Electric Cars Be Saved in 2012?

The electric car revolution was in full swing at the beginning of 2011. General Motors introduced the Chevy Volt plug-in amid much fanfare, including a highly-hyped Super Bowl commercial. The Volt even earned Motor Trend magazine's 2011 Car of the Year award. President Obama touted the benefits of electric vehicles in his annual State of the Union speech. Plug-in electric cars seemed ready to give the auto industry and the economy a jolt.

Somewhere along the way, however, the electric car surge got short-circuited.

The electric Nissan Leaf debuted to projections that the company would produce and sell 20,000 cars by the end of the year. By June, Nissan had cut that number in half. In the end, sales didn't even reach those lowered expectations.

GM sold only about 8,000 Volts nationwide in 2011, and just after the new year began, had to recall all of them. An investigation by the National Highway Transportation Safety Administration resulted in two Volts catching fire after simulated crash tests, and Chevy asked owners to bring them all back for modifications.

Can eco-friendly electric vehicles get back on course in 2012?

"Electric vehicles are still in their infancy, and while we've seen some recent model introductions, consumer demand has so far been modest," says Gary Silberg, of the financial analyst firm KPMG. "We can expect no more than modest demand in the foreseeable future."

In fact, a recent survey showed that interest in purchasing a plug-in electric vehicle actually fell in 2011 for the second straight year. But why isn't demand increasing instead? After all, the introduction of eco-friendly electric cars was met with such applause. States offered tax incentives. Cities installed charging stations. Environmental organizations were ecstatic.

"Electric cars are terrible. They just are," says auto industry expert Joel Johnson. "They're a solution for a problem we don't have. For most of the American market, the only advantage electric cars offer over gasoline-powered vehicles is the permission to daydream about a time when their decision to drive in the first place doesn't hurt the environment."

Automakers have a difficult task in 2012 if they are to rescue the electric vehicle industry. They must overcome consumer perceptions about costs, driving range and--given the massive Chevy Volt recall-safety.

"Price is the most significant barrier to consumer interest in electric vehicles," says John Gartner of clean technology consulting firm Pike Research. "About two-thirds of our survey respondents who stated they would not be interested in purchasing a PEV said that they felt such a vehicle would be too expensive. Others said that they would want to wait a few years until the technology is more proven, and almost half said that a PEV would not have sufficient driving range for their needs. These are all key issues, both real and perceived, that automakers will need to address if PEVs are to move successfully out of the early adopter phase."

Rick Blaine is an award-winning broadcaster and columnist.