With gasoline prices rising and more people around the world moving to cities, there is a concerted push for the automotive industry to reinvent itself as consumers look for alternatives to the internal combustion engine.
Investors and manufacturers such as California-based electric carmaker Fisker Automotive, Tesla Motors and Better Place, are betting that innovation in battery technology will make electric cars the transport of the future.
However, the extent of the disruption caused by new electric and hybrid-powered car technologies in the auto industry remains to be seen. It is still debatable if consumers are willing to pay a premium price to be green.
Boston Consulting Group cut its U.S. electric vehicle penetration estimate by two-fifths to just 3 percent by 2020. Research conducted by Bloomberg, New Energy Finance suggests that price, at least in the short term, will be the most important factor for plug-in vehicle sales.
Bloomberg's study shows that plug-in vehicles have the potential to capture 9 percent of new car sales by 2020 and up to 22 percent by 2030, but achieving growth of that magnitude will only come if battery costs dip and fuel prices rise.