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battery cell makers are becoming more efficient, which means it will be more difficult to convince the public to buy an $80,000 car that makes no noise, explains keller. as the industry becomes more efficient, it will start becoming a commodity, she added.

considering the potential damage to the japanese industry that could be caused by tesla motors breaking into the market, the prius was selected as a natural competitor to show the durability of japanese vehicles and the japanese industry in general, a person close to the matter said.

meanwhile, ford appears to be joining toyota and general motors in the game too, selling about five per cent of all hybrids in the us, according to the us government. but gm, unlike toyota, is suffering a cash crunch and does not intend to stick its neck out in this market. while it has a good-sized stable of product planners and engineers in detroit, detroit is not a winning position right now. gm is in a bit of turmoil and that is not a position that gives you a lot of room to manoeuvre.

we want to move our corporate culture into a new century,” duggan said at the white house this week. “the fact is this (plant) is inadequate for any major car company.”

general motors is facing the same problems as ford and other us carmakers — revenue is declining, profits are down, and the company faces a pension liability — it is trying to offload itself of non-core assets to limit its pension liability. there’s a lot of room for competition in this segment of the market, rien brown, managing director of equity research at j.p. morgan, said.

the way i see it is that toyota lost a good chunk of market share to hyundai and honda, who have been aggressive about it. the only people left are japan and ford, which we have seen has fallen behind honda in overall hybrids in the us market. toyota has essentially saturated the market and it’s going to get more expensive to build hybrid cars. the only thing that prevents a potential ev from being viable is battery technology.

this year toyota and honda are implementing a co2 emissions reduction plan for the 2010 model year that will require smaller and lighter engines that are “more efficient,” according to company spokesman robert lutz.

in a market where the “big three” toyota, honda and nissan can claim a sizable slice of the hybrid pie, the smaller, more affordable us hybrids have been in decline, as the battle between the volt and the nissan leaf has been all-out for the lead in the plug-in segment. honda’s new clarity has the hope of bridging that gap and giving honda a fighting chance. the nissan leaf has been the no. 1 selling plug-in electric car in the us by a wide margin this year, but the volt — with a significantly higher sticker price and built mainly for the commercial market — has been the leader in terms of market share. but other carmakers are struggling to keep up with tesla. even automakers that had long resisted the lure of electric cars are getting into the game. daimler, ford, bmw, general motors and chrysler are working to develop electric vehicles. tesla has faced skepticism because the company’s cars are not officially on the market yet and they are priced higher than mass-market cars. tesla is targeting a list of luxury and elite consumers. these include the younger, more affluent generation who shun the conventional car industry. many, like musk, had derided mainstream automakers for stubbornly clinging to their old ways as they struggle to make inroads in the global market. tesla’s brand is barely known outside the west, although, thanks to legions of enthusiasts, tesla is an internet phenomenon. despite the sophistication of the technology, many people can’t seem to understand it. tesla’s website is so hard to find that more than once i wanted to save a web address in a bookmark and send a link to a friend — only to find out the address didn’t work. the site’s lack of visibility is the product of careful planning by its designers. 5ec8ef588b

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