Model S

Tesla Motors is considered by many to be leading the charge in the electric vehicle space. Model S pictured. Source: Tesla Motors.

Electric vehicles are beginning to gain traction both internationally and here in the U.S. This growing attraction to electric vehicles has no doubt been helped along by Tesla Motors' (NASDAQ:TSLA) Model S, Consumer Reports' highest-rated vehicle.

One of the biggest concerns for electric vehicles is the driving range, which is typically very low for electric vehicles. With the exception of the Model S (which can go 265 EPA-estimated miles per charge on an 85 kWh battery), only one other electric vehicle has a range of more than 100 miles, that being the Toyota (NYSE:TM) RAV4, with a range of just 103 miles per charge. 

In an attempt to relieve this "range anxiety," charging stations are springing up around the U.S. (the equivalent to a gas station for electric vehicles).

Currently in the U.S. there over 8,500 charging stations and 20,500 charging outlets. This is significantly lower than the approximately 121,000 gasoline stations in the country, but electric cars have a much smaller footprint in the overall auto industry, so right now the smaller number of stations makes sense. 

So, will electric cars matter or not?
On CNBC's "Fast Money" TV show earlier this month, Bob Carter, senior vice president of automotive operations in the U.S. for Toyota, said, "What's so exciting for fuel cells is that while we do believe that electric vehicles have a spot in the U.S. market, it's going to be a very small spot." Carter was referring to the prospects of Toyota's new hydrogen fuel cell car, which it expects to debut in 2015.

However, what's important to consider is the fact that he believes electric vehicles will essentially be a niche market in the future, or in his words, have a "very small spot" in the U.S. auto market. This would bode quite poorly for Tesla. 

Of course, we should probably take Carter's words with a grain of salt, especially considering his stance on hydrogen fuel cell cars. I, for one, do not expect his electric vehicle prediction to come to fruition. 

Even as petroleum-based vehicles work to boost fuel efficiency in accordance with the Environmental Protection Agency's standards over the next decade, I expect electric cars to play an important role going forward. Drawbacks to owning an electric vehicle are diminishing, especially with companies like BMW and Tesla making more luxurious versions. 

Bmw I

BMW i3. Source: BMW.

MIT recently cast a fairly wide net, suggesting that 25 years from now, electric vehicle sales could make up as little as 3.7% of total vehicle sales or possibly as much as 50%. This depends on "if there's a coordinated effort to push EVs," according to CNBC.

In the U.S., electric vehicles make up roughly 200,000 of the current 242 million vehicles, or just 0.08%, according to Navigant Research. Although a market share of 3.7% is handily higher than today's current share (if it were in today's figures, that would represent nearly 9 million vehicles), it's likely severely below what many electric car enthusiasts are expecting 25 years from now. 

On a brighter note...
However, the MIT study also leaves room for electric vehicle market share to climb toward 50% of total vehicle sales. Even using the midpoint of its 3.7% to 50% range, which is 26.85%, represents a fairly large amount of the auto market. 

Others in the industry are more bullish. According to CNBC, Bob Lutz, former vice president at General Motors, predicts that almost all private transportation will be done by electric vehicles in 25 years, and that driving range concerns will be relieved in 10 to 15 years. 

Kevin Riddell, manager of power-train forecasting at LMC Automotive, was slightly less bullish than Lutz, but bullish nonetheless. He told CNBC that petroleum-based vehicles are still likely to make up 50% to 75% of total vehicle sales by 2039. 

Read differently, electric vehicles could make up 25% to 50% of total vehicle sales in 25 years. 

Of course, investors should understand that forecasts are not guarantees. While industry experts may expect the EV market to be strong in the future, another technology or other unforeseen hurdles could slow or alter the growth process. 

Getting better, faster
Aside from range anxiety, another issue with electric cars is the price. The Tesla Model S starts near $70,000 and the upcoming Model X SUV is unlikely to be much cheaper, if any.

The BMW i3 and i8 start at about $42,000 and $135,000, respectively, while the Toyota RAV4 starts at about $50,000. However, the Tesla Model 3 -- which could come in 2017 -- will hopefully be in the mid-$30,000 range, and may be able to help bring electric cars to market in larger quantities. 

Of course, part of the reason that electric cars are so expensive in the first place is because of the expensive batteries. But as battery technology improves and prices decline (helped by increased supply), so should the final price of the vehicles. Lower vehicle prices should help attract more consumers.

Battery technology is coming a long way as well, as different approaches are being taken to improve lithium technology. Volkswagen is investigating lithium-air batteries, which could be a revolutionary step in battery technology, according to the BBC. Others are in the race as well. From the BBC article: "'There are materials we are working on at Argonne which can double the current energy density available for batteries,' says Daniel Abraham, a material scientist at Argonne National Laboratory."

For electric vehicles to really go mainstream, battery prices need to decline and battery technology needs to improve. Fortunately, many of today's industry leaders appear to realize this, and are working on ways to conquer the challenge. 

Rav

Toyota RAV4 EV. Source: Toyota Motors

Sobering thoughts
While electric-car dominance seems unlikely by 2039, like Lutz predicts, so does its near-irrelevance, like the worst-case scenario from the MIT study or Carter would suggest. 

Even if hydrogen fuel cell cars do become all the rage, I think electric vehicles will actually be a complement to them rather than become diminished to a niche market because of them.

As driving ranges increase and electric vehicles go from small and odd-looking cars to larger, sporty rides (helped along by Tesla and BMW), other manufacturers like Ford and General Motors can hopefully find ways to make similarly attractively rides. 

Electric vehicles are still in the early innings. With their zero emissions and fuel cost-savings for consumers, I find no reason to assume Tesla, or electric vehicles in general, will be a niche category 25 years into the future. Especially if EVs are able to come down in price, while the number of charging stations continue to increase.

Bret Kenwell owns shares of Ford. The Motley Fool recommends BMW, Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.