Falling Gas Prices Could Put Electric Car Back in Neutral

Surge got automakers in gear, but economic downturn makes new projects tougher
By Kevin Spak,  Newser Staff
Posted Oct 20, 2008 10:01 AM CDT
A charging plug of a prototype of an electric car is seen during a display of the car in Tel Aviv, Israel, Sunday, May 11, 2008.   (AP Photo/Ariel Schalit)
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(Newser) – Car companies are revving up work on alternative energy vehicles, responding to higher oil prices that, well, don’t actually exist just now. New cars take about 5 years to roll out, meaning the auto industry can’t nimbly react to price changes: Oil, which cost $130 a barrel just 4 months ago, now hangs close to $70, creating fears that $2.50 gas will quash demand when the cars eventually roll off the line, the Washington Post reports.

"Declining oil prices can give us an artificial and temporary sense that reducing oil consumption and energy consumption is an issue we can put off," says one investor. But forging forward may be easier said than done, as the stress of the credit crisis is making it tougher to find financing for projects like new assembly lines. Even by what one consultant calls “heroic” predictions, electric cars will only make up 8% of cars on the road by 2030.