THE DANGER IS NOT FROM CONVENTIONAL CARS...:

There is good reason to conclude that electrified vehicle creators may not be the latest Charles Babbages, and despite this rough patch will soon play a major role in the automotive industry. Consider who holds the betting line against them: Big Oil, which has a highly personal reason to cast a skeptical eye--namely, self-survival. ExxonMobil and BP, among others, have issued 25- and 30-year projections saying that motorists will embrace the marginal added fuel efficiency of cars like the Prius with smallish batteries, but not pure electrics like the Leaf or plug-in hybrids like the Volt. These Big Oil projections assert that the electric crowd will fail to produce the innovations necessary for plug-in hybrids or electric cars to make a big commercial splash. Instead, says ExxonMobil, 90 percent of global transportation will continue to be fossil fuels at least through 2040.

It is arguable that plug-in hybrids are early, even very early, but would you bet the company on chronic scientific and commercial failure lasting three decades? If the electric crowd is guilty of hope-led naiveté, Exxon and BP may be misleading themselves through self-interest-driven blindness.

Yet the electric-car industry remains uncertain as to where it is situated in the innovation cycle. The other side of the valley of death--to be reached at the earliest when the next generation of lithium-ion batteries lowers the price of electrified cars--is at least three to five years in the future, industry hands believe. At this point, electrified vehicles can begin to seriously close the price-and-performance gap with gasoline-driven cars, allowing them to commence a long ascent toward a mass consumer market. But until that starts, one must survive.

So how can companies end up like Thomas Edison and avoid the fate of his commercial failure rival--Nikola Tesla, a legend only in death, and the namesake of Musk's electric company?

Musk's solution is to grapple with the market currently at hand. In the case of electric cars, there is no mass consumer market as yet. So he has sold out a niche $109,000 sports car and begun to work his way gradually down the pricing scale. Electric cars are following the long innovation-and-commercial arc of cell phones, asserts Ricardo Reyes, Musk's vice president of public communications. "[Cellphones] were almost prohibitively expensive at first," Reyes told me. "You had some adoption by early adopters, initially wealthy folks. As technology went up and price went down, market demand increased. Now you have everyone with a cellphone in their pocket."

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