by Nathan Hook

Created on: January 23, 2009   Last Updated: May 23, 2009

Electric vehicles do have a chance of rescuing the American auto industry, but there are currently a variety of impediments which may change the face of the industry we currently recognize. In the short term if we are to believe all of the hype from the auto industry spin-doctors there are likely to be significant and sustained financial hardships for the major manufacturers. We may see insolvency amongst some of them and radical changes in the way in which the industry operates. Thus, electric vehicles and their technology, remain more of a long term solution still to problems we paradoxically face today.

It has now become a reality that the US, and indeed the world's, economy is in a recession. We are bombarded with news reports of slumping sales in the retail sector, dire predictions for economic growth and even new President Obama, has been vigorously promising financial rescue packages to stimulate recovery. This massive slump combined with the high gas prices last year suddenly spelled disaster for new car sales. Today, thousands of vehicles are sitting in storage on LA wharves unwanted by car sales yards due to the reduced demand, especially in the luxury car market, and many car sales personnel have found themselves made redundant as a result.

According to wot.motortrend.com, all the major manufacturers saw massive slumps in sales, even in highly popular models such as Toyota's Prius. Only Honda and its' Civic range actually sold a mere 2.1% more vehicles than in 2007, but this trend was obviously not enough to stop the company from pulling out of future support for its' hugely expensive Formula One team. A backlash against large SUV's was fairly obvious during the 08 fuel hike and sales in the SUV were amongst the worst; only the Nissan Rogue flew in the face of the trend, topping the best selling vehicle for the year. Nevertheless, the trend against SUV's and gas guzzling cars has been quietly brewing for some time now and manufacturers have been cashing in on the small car and hybrid car market for several years. In 2008's worst selling vehicles, the SUV was still over represented as a casualty of the economic crisis.

The question of course is what does this all mean for the American auto-manufacturers? It is fairly obvious to anyone with basic business common sense that even with the huge rescue packages that some of the manufacturers asked for, that stop gap measure is not going to solve the problem and prevent the hemorrhage of money

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