DETROIT -- U.S. Energy Secretary Steven Chu said today he believes electric cars will be a major segment by 2020 because of the "plummeting" price of batteries.
Chu, speaking to reporters today 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.
Chu stopped to take a look at Chevrolet's new Eco version of the Malibu, a car equipped with a small battery to improve fuel economy, and the Spark minicar. He walked by GM's much-publicized Chevrolet Volt, but didn't stop at the display.
When asked if he wanted to take a photo with the Volt, Chu declined saying he's already seen the car many times. Despite the government's optimism, buyers aren't exactly flocking to electric cars. Sales of the Chevrolet Volt -- among the first mass market plug-in cars to hit the market -- missed expectations last year with GM selling about 2,300 less than anticipated.
The Volt , a plug-in electric car with a back-up gas engine, went on sale in December 2010, along with Nissan's all-electric Leaf. Last year, Nissan sold 9,674 Leafs. The Obama administration has been a strong advocate of electric vehicle technology, touting it as a way to lessen the nation's dependence on foreign oil and move the industry to more environmentally fuel sources.
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."