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Will Electric Cars Ride an 'IPod Effect'?
CNBC.com | September 13, 2010 | 10:09 AM EDT

With this being the autumn of the electric car ramp up, the skeptics scoff at all the lithium-ion battery plants and assembly lines firing up around the country.

The naysayers think there will be too much capacity and too little demand. In their eyes, the $2.4 billion Uncle Sam is spending on getting this industry off the ground is good money delivering too few jobs and too little return.

A123 Chief Executive Dave Vieau sees it far differently. Vieau is opening a new plant in suburban Detroit that will supply lithium-ion batteries to auto makers in the U.S. and Europe.

Initially, A123 will hire 300 employees for its Detroit plant, and by 2012 increase that employment to 3,000. That's all very nice, but Vieau knows the success of this plant and A123 depends on electric and plug-in cars taking off.

Vieau has seen the projections, and he tells me that forecasters are missing the "iPod effect" that will spark demand for electric cars.

In fact, Vieau thinks that 2016 there will be an inflection point in sales brought on by people who have driven an electric car and will consider an EV a "must have" item. Much as the iPod took off, once people saw the quality and possibilities opened up by Apple's music machine.

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