Why the electric car is auto industry's new darling

What was until recently on the test tracks till a few years ago is soon going to be on the roads. CNBC-TV18's Sumantra Barooah reports why automobile majors are bullish on electric cars now more than ever before.

Renault, which together with Nissan sells over 6 million cars annually, plans to be the first automobile company to have a full line of electric vehicles in 2011. This, even as it failed in an attempt to sell an electric car 15 years ago. So, why is Renault's chief Carlos Ghosn confident this time around?

"Conditions are totally different now. Technology has changed. What we are capable to do with batteries is completely different from what existed 15 years ago in terms of autonomy of the car, size of the battery, longevity of the battery. Second, today the problem of the environment is not a problem for the specialists. The public wants more environmentally friendly car, which was not the case 15 years ago," he said.

The other reason for his bullishness is the price of oil, which is less than half the USD 150 mark it touched last year, but Ghosn sees it moving northward.

Back home, Bangalore-based electric carmaker Reva has struck a big deal with General Motors to provide electric technology. Reva has sold 3000 cars since 2001 but the number of electric cars is set to grow rapidly now as GM India doesn't want to restrict the technology only to the small car platform. Slym says GM is looking at the small car platform.

While GM India launches the Spark Electric here, its parent will launch the electric hybrid-volt in the US. According to consultancy firm Frost & Sullivan by 2020, 10-12% of the projected car market or about 8.5 million people will opt for electric cars from companies like GM.