Study – Electric cars cost-effective by 2020 without subsidies

No need for plug-in subsidies in another decade or less?

Gas prices still a wild card?

According to a recent Deutsche Bank forecast the current pace of lithium-ion battery cost reductions should make pure battery-powered electric vehicles cost-effective – payback in 3-4 years compared to gasoline – by around 2020 without the need for subsidies based on recent discussions with industry experts and several automakers.

Nonetheless, the DB study is forecasting slow electrification in the interim and greater demand for gasoline. Still, long term a “shift to a more efficient transportation system” now seems almost inevitable.

Similar to other studies, the DB study also forecasts that micro-hybrids will replace most conventional ICE vehicles by 2020 as well, and that the ethanol tax credit might be near its end.

Interestingly, however, DB also notes that despite rising gas prices in 2010, the sale of hybrid cars declined everywhere in the world but Japan, where the Toyota Prius has dominated auto sales. Ultimately, the DB team found that consumers were simply less concerned about gasoline prices in 2010 and, therefore, less concerned about fuel efficiency in general.

In response to this declining interest in fuel economy, DB notes, “As we’ve said before, it may take another $140/bbl+ oil price surge to truly and finally change US transportation behavior and policy.”

As we’ve said before, might not a temporary spike in gasoline prices soon be the best thing for America?