Recently, the production of electric cars has expanded, albeit at a limited and slow rate. The main reasons behind this interest in this type of cars are the growing concerns regarding environmental pollution and the high prices of petroleum products due to increased governmental taxes on gasoline and diesel. In truth, these taxes are in many instances a significant source of revenue for budgets, and hence, it is hard to easily dispense of them, or even lower their rates. Many international companies are competing today in manufacturing different types of electric vehicles, and their bids in this regard are often assisted by financial incentives and tax exemptions. This has ultimately led to lower electric car prices, with the result being that they now compete with the prices of conventional cars (equipped with internal combustion engines) The price range for electric cars at present is between 25 thousand and 30 thousand dollars, compared to over 40 thousand dollars a short while ago. But it would not have been possible to have had lower prices for electric cars, had it not been for government subsidies and tax exemptions applied to these cars. For instance, the Mitsubishi Corporation introduced a four seat electric car at 30,500 dollars, after the Japanese government provided it with financial incentives. In addition, Nissan introduced another electric car at 32 thousand dollars; Nissan also received financial incentives from the Japanese government, which helped cut the original price of its car, namely, 40,500 dollars. Furthermore, this car will be made available in the U.S market at the price of 25 thousand dollars, also due to tax exemptions on electric cars in the United States. In China, the government-owned Chinese car company began selling its electric cars at the price of 25 thousand dollars. And in the United States, Ford is planning to begin marketing their electric cars in late 2011. This is while Citroen in France announced that it will also venture into this field, and will introduce its electric models soon. Moreover, the German group Siemens has begun promoting its first electric car. This gradual adoption of the electric car is taking place in conjunction with new legislation in the United States that encourages the more efficient consumption of fuel, where small cars would do 39 miles per gallon, while buses and trucks would do 30 miles per gallon, as of the year 2020. For its part, the U.S Environmental Protection Agency considers electric cars to be free of any emissions of carbon dioxide, despite the fact that they rely on electricity which is otherwise generated through gas or coal. It is worth mentioning here that electric cars were used broadly between the mid-nineteenth century and the early twentieth century, when electricity was the preferred form of energy instead of gasoline. And indeed, the first hybrid car that operates on both electric energy and gasoline was built in the United States in 1917. However, the developments in technology, economy and services that transpired at the time, tipped the balance in favour of cars that operate on gasoline instead of electricity, as it became possible to drive a gasoline fuelled car for bigger distances than electric cars, without the need to add more fuel and instead of charging the electric battery. Also, gasoline can be pumped at a faster rate into the car than the time required to charge the electric battery. This is also due to the widespread presence of petrol stations in cities and on highways. Moreover, the other factor that helped increase the popularity of internal combustion engine cars (gasoline or diesel), which overtook electric cars, was Ford's decision to reduce the price of internal combustion engine cars to half of that of electric cars, in addition to the mass production of these cars. As such, internal combustion engine cars dominated the U.S market in the thirties. What is to be expected then? Will electric cars succeed in restoring their position in the market? It will be very difficult for electric cars to dominate the markets again, at least in the short term. There are hundreds of millions of conventional cars that roam the roads across the world, against a few thousand electric cars. Also, in order to modify this industry, and the service stations attached to it, much larger efforts than what we see today must be pursued to this end. Despite governmental financial assistance and tax exemptions, electric cars are still at a higher price range than [conventional] cars. In fact, electric cars will need much larger financial assistance in order to economically compete with conventional cars. There is also the issue of reliance on gasoline or diesel which are sufficient for conventional cars for longer distances, unlike the need to charge the electric battery over shorter intervals of time and smaller distances. And as far as the environment is concerned, generating power for batteries also produces inevitable pollution, albeit at a lesser magnitude than that generated from burning fuel for cars. Furthermore, with regard to the price of fuel, it is expected that governments will pass new laws and adopt new tax measures after a while – after having paved the way for electric cars to enter the market – in order to supply their budgets with the necessary revenues to compensate for the lost taxes as a result of reduced consumption of gasoline or diesel. But in the midst of these questions, the oil industry will remain perplexed and caught in an atmosphere of uncertainty. This is because the transportation sector is the primary market for petroleum, and any challenge for oil in its most important niche, even over the medium or long terms, will impact the investment plans for both oil producing countries and international oil companies. *. Mr. Khadduri is an energy expert
