Are Electric Vehicles Ready to Peel Out?

Phillip is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

In deciding whether or not electric vehicles are ready to take a hold of the auto market, it is important to make the assertion that not all car companies are created equal. Some are prone to corruption, as one video which has been supported by media organizations has claimed.

Who Killed the Electric Car?  was released six years ago, and reveals a powerful oil lobby that triggered General Motors (NYSE: GM) to destroy all but a few of its EV1 electric vehicles in 2002. GM claimed at the time that the EV1 targeted an unprofitable niche. However, reaction to the EV1 from customers was positive. The cars were crushed, even though customers protested.

But has the electric car undergone a transformation in recent years? It appears it has, or that it at least might have. That type of apprehension has been a mainstay in the development of electric vehicles. A strong indication of the change is shown in Tesla Motors' (NASDAQ: TSLA) announcing its first-ever quarterly profit in May. That is a good sign, so long as Tesla doesn't fall into the same trap GM did when it was allegedly coerced to destroy its development of the EV1.

Tesla has certainly gained much attention from its Tesla Model S, which Consumer Reports magazine dubbed the "best car we've ever tested." 

Is this enough to bank on Tesla?

So far we have one company that has allegedly sold out Mother Earth and one that is the "toast" of the environmental town. This relatively new kid on the block could be one of those small(ish) companies that ends up being a real game changer. This rings a bell... Oh yeah, it sounds like Apple in the early 2000's when that company's stock launched into orbit.

But there is one screeching factor that has many car critics snubbing the electric vehicle, calling it a car for so-called "tree huggers:" the look. Anyone taking a glance at the Tesla Model S, however, can see that it is as slick as a stallion. This car is certainly far of the traditional electric vehicle critics' criticism that the vehicles are akin to golf carts. 

Now that the Tesla Model S scores high in the looks department, what does it have under the hood? Batteries are certainly the stumbling block for many technologies. With the Tesla Model S being able to drive for up to 300 miles on a single charge, there could be enough oomph to make the vehicle mainstream. The average American commute is 40 miles per day, so that's plenty of staying power. 

For those wanting to drive long distances for mud wrestling contests, for example, now might not be the time to buy an electric car. That will keep this vehicle out of the mainstream, but not likely the Model T (or whatever the next edition of the Model S will be called in the end). The company reported it is only building 20,000 Model S vehicles in 2013, so fingers crossed for next year. 

Who's fueling battery research?

General Electric (NYSE: GE) is a major player in the lithium batteries market, and this company could help charge a breakthrough in electric vehicles. Much of the company's research and development is focused on batteries. Both hybrid and battery technologies can improve the abilities and performances of a number of transportation platforms, including cars, buses and tugboats. The company also has the funds to budget research from some of the best scientists in the field. 

The electric vehicle market is very dependent on massive firms with a load of research and development money with which to work. And that is exactly what GE is doing. The company announced its development of hybrid and battery technologies to "accelerate the electrification of several transportation methods." That announcement was made in 2008, and details about the company's progress have been relatively unsubstantial. This could indicate that electric vehicles are a long way off from having the type of battery support needed to give the industry staying power. GE did release a Durathon battery that worked with a lithium battery and a hydrogen fuel cell last December, however. The company said the energy source could "help accelerate both fuel cell acceptance and electrification of bus fleets." There is still no word on whether the concept can be applied to cars, though.

This shows that the electric vehicle market, and specifically Tesla, is currently dependent on technologies out of its control. But 300 miles per charge isn't bad, so maybe the masses will learn to consolidate their traveling needs before peeling out in one of these beauties.

Tesla's plan to disrupt the global auto business has yielded spectacular results. But giant competitors are already moving to disrupt Tesla. Will the company be able to fend them off? The Motley Fool answers this question and more in our most in-depth Tesla research available. Get instant access by clicking here now.

 


Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends General Motors and Tesla Motors . The Motley Fool owns shares of General Electric Company and Tesla Motors . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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