Turning Points: Crisis a Silver Lining for Electric Cars

The global recession will lead to increased technological innovation in the auto industry.

Published: 11-Feb-2009

The next five years is likely to see the rapid development and deployment of new vehicle technology in the context of favorable policies taking shape in the United States, Europe, China and Israel. While the global recession, credit crunch and low oil prices will act to slow investment across the economy, aggressive industry policy to support "electrification" of road transport will help cushion manufacturers of electric and other highly efficient vehicles from the recession's effects.

A major problem with electric- and hydrogen-powered vehicles is refueling away from an established network. This has limited the range of electric vehicles and stunted consumer demand. Combining a plug-in electric motor capable of comfortably covering city commuting (up to 100 kilometers) with a backup combustion engine (also capable of using biofuels) for longer journeys solves this problem. This is why the plug-in hybrid has to date been more successful than 100% EVs.

Turning points. Technological turning points tend to be heralded by bubble economies followed by crisis, which drives the impetus for change. Such a structural shift may emerge with the current economic crisis: Shifting consumer preferences and politics are pushing the car industry towards more environmentally benign technologies. Several key countries are positioning themselves to be leaders in the EV market:

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