Government subsidies also have played a role, according to analysts. Nissan and Tesla were awarded nearly $2 billion between them from the Department of Energy's Advanced Technology Vehicles Manufacturing loan program to build electric vehicles. Many other companies, including EV battery makers, have also received subsidies. "On the surface, it appears to be a huge risk to roll out these vehicles that people might not buy," See said. "But in many cases, a lot of the cost and risk has been subsidized by the government."
Moreover, the appearance of risk may not be as great as it first seems, at least for some automakers. Experts say pure electric cars can be much easier to manufacture than hybrids. "If you look at the Ford operation in Wayne [Mich.], they can do four different kinds of powertrains: conventional engines, plug-in hybrids, conventional hybrids, and electrics," David Cole, chairman emeritus of the Center for Automotive Research, told us. "EV technology is a walk in the park compared to hybrids. You just have to build flexibility into your manufacturing systems."
Still, the road to EV sales success is a hard one. Sales of the most prominent pure electric car available today, the Nissan Leaf, totaled just 8,720 units for the first 11 months of this year, according to plugincars.com, despite company projections that it would sell 500,000 EVs a year by the end of 2013. A Wall Street Journal report this year (subscription required) indicated that Nissan was sticking with its plan to sell 1.5 million EVs cumulatively by 2016, "in part due to demands by major cities for zero-emission taxis."
That's why Nissan CEO Carlos Ghosn has predicted pure EVs will make up 10 percent of the market by 2020. And, as we reported this summer, Tesla CEO Elon Musk took Ghosn's prediction up another notch by saying he believes half of all cars on the road will be pure electric ones in 15 years.
However, industry analysts say much of the auto industry doesn't share the rosy views of Nissan and Tesla. Cole chaired a session at the recent Battery Show Conference in Novi, Mich., and he said automakers expressed concerns at the conference about the state of EV batteries. The sesison was "an opportunity for the automakers to tell the battery guys what the reality is," Cole said. "Right now, the battery is still a killer for them."
Analysts also say the automakers building compliance cars want to be ready if battery technology makes a sudden leap forward. Until then, they're treading lightly. "The bottom line is that the technology is not a slam dunk," See said. "That's why they need to keep looking for the innovation that could make it happen."