DETROIT (Jan. 13, 10:05 a.m. ET) — U.S. Energy Secretary Steven Chu said he believes electric cars will be a major segment by 2020 because of the “plummeting” price of batteries.
Chu, speaking to reporters on the sidelines of the Detroit auto show, said he thinks the industry has a “good shot” of hitting the Obama administration's ambitious target of putting 1 million electric vehicles on the road by 2015.
“Whether it is 2015 or 2016 or whenever, I don't know. I think it is possible,” Chu said. “It depends on a lot of things. The price of batteries is plummeting.”
Three or four years ago, the cost of manufacturing a battery was $1,000-$1,200 a kilowatt hour, Chu said. It's now about $600 a kilowatt hour, he added. “It's going to come down and everyone knows this,” Chu said, after touring the General Motors' display at the show.
In new fuel economy rules proposed for the 2017-2025 model years, the government has included a slew of new incentives for battery-powered cars. Chu said the technology is still new and buyers are warming up to it, but eventually, like the acceptance of hybrid cars, electric vehicles will become a bigger part of the market.
He added: “The plug-in hybrids will become mainstream, followed by the all-electric vehicles.”
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