Could Electric Vehicles Be the New SUVs?

(MoneyWatch)  Consumer preference often works in unpredictable ways. America's big vehicle manufacturers switched their efforts to making SUVs when the lumbering, high-priced vehicles became favored by soccer moms and hip-hop culture. Now SUVs are fading out, and hybrid and electric cars are being pushed by the Fed, which is in turn the guiding force behind Chrysler and General Motors.

It has always been the desire of vehicle makers like Toyota to make hybrids like the Prius popular with the mass market. In reality, hybrids are more of a niche movement among environmentally-conscious buyers who have the money. That's quite different from the kind of popularity SUVs enjoyed, when people would happily buy an Escalade worth more than their yearly income.

The current recession makes it difficult to imagine that scenario playing out again anytime soon. But a few years may serve to change opinions. And unlike the Prius, GM's Volt is already drawing high praise. USA Today, for instance, says the car has "remarkably punchy performance" that could "embarass muscle-car drivers".

Coming in at over $35,000 before any government rebates, the Volt will definitely be in a different price class than the Prius, Honda Insight, or Ford Fusion, the last of which is already selling quite well. The problem is that early plug-in hybrids like the Volt will almost certainly all come in at over $30,000, so they'll have to impress drivers with more than their green credentials. Customers looking for that will be more easily satisfied by economy cars and mild hybrids (the National Post has a good summary of the different gradations of hybrid vehicles within another article about the Volt).

The only solution is to make vehicles that are, in some other capacity, vastly more desirable than your run-of-the-mill car. Confidence in GM to pull off an innovative new model has ebbed, but the company appears to have changed some of its old bad habits to build the Volt.

One might point out that startups like Tesla Motors and Fisker are also reaching for the high-end market. But those companies sell electric cars for upwards of $80,000, making them unattainable to the average Joe. If GM plays its cards right, it might just find the perfect middle ground, creating the next fad in the process and dragging the entire electric vehicle market along with it.

Of course, this is all part if the optimistic scenario. For the pessimistic one, that the US auto market will never recover, try the LA Times.