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Many have been uncertain about the potential of electric cars making a real dent in the auto market, and to some degree, they have had good reason. Purely electric vehicles have struggled to gain a foothold, but plug-in hybrid vehicles like the Chevrolet Volt from General Motors Company (NYSE:GM) have been doing quite well. Others are taking note of the success of these vehicles, but General Motors is in a good place to dominate the market, with the Volt being one of the earlier success stories with this type of vehicle. This vehicle puts General Motors in a good position to enjoy the benefits of plug-in hybrid popularity and the more traditional options as well. While its success will increase the competition, growth in the plug-in market should offset this and keep General Motors in a strong position.

General Motors has seen its price declining from February all the way through July. It's just starting to return to its early 2012 level. The Volt could be one factor that helps turn around the company's bad fortune. The company announced revenue growth of 4.32%, and its earnings yield is 18.13%. It reported an operating margin of 3.8%.

Hybrid and electric vehicle sales, as a whole, did increase in the United States in June when compared to June last year, but this can be a little deceptive, as the number of models also increased. Regardless, the Chevrolet Volt was one of the major successes, improving sales by 200%. Toyota Motor Corporation's (NYSE:TM) Prius was also a major success in this industry, with sales jumping 300% year-over-year. Nissan's Leaf, and Honda Motor's (NYSE:HMC) CR-2 and Insight vehicles were the main disappointments. There is more to this story, however, as things were not so uniform across the hybrid and electric car industry.

While the industry has been booming, sales of "pure" electric vehicles have failed to make any significant impact on the industry. These are vehicles that run solely on electricity and do not have a gasoline engine that begins when the charge wears off. Ford Motor Company (NYSE:F), BMW, Honda, Nissan, and Mitsubishi have all attempted to market "pure" electric vehicles, and they have not done well. By comparison, plug-in hybrids, led by the Volt and the Prius, have been doing quite well, jumping 381% as a whole in the first half of the year. General Motors chose a good kind of vehicle to invest in, as its competitors have been largely wasting money on unsuccessful products.

With success comes greater competition, though. Ford is attempting to shift its effort toward these more successful areas of the market. It will be launching its C-MAX Energi plug-in and C-MAX Hybrid this year, and it recently released partial specs for the Energi, showing that it may be a better offering than the Prius. Of course, details about the vehicle are not complete, and the reputation of the Prius will buy it some time until it can put out an improved version, even if the C-MAX vehicles are technically better. Either way, this will amp up the competition in the plug-in industry, and I am sure that more companies will follow suit and offer plug-ins as well, which is not great news for General Motors or Toyota. As these two have a head start on the others, however, I expect them to continue to dominate this market, at least for a while into the future.

As things stand, I think it just seems unreasonable to expect "pure" electric vehicles to take off. Until electric charging stations appear in a greater number of places, it is just too risky to drive without a gasoline engine backing it up, especially on longer trips. Charging stations will become a bigger thing in Europe, but this will not happen for a while. The business for electric charging stations may rise by 1000% by the end of the decade, but this is largely in anticipation of more plug-in cars. Even when charging stations become more important, "pure" electric vehicles just seem like a bad alternative. One has a back-up plan while the other does not, and I am not surprised by the low numbers for "pure" electric vehicle sales.

Tesla Motors' (NASDAQ:TSLA) CEO Elon Musk recently predicted that more than half of new cars will be fully electric by sometime between 2024 and 2032. I simply cannot see that happening, and analysts have been skeptical as well, predicting 1% or fewer new cars will be fully electric by 2020. I think Musk is overstating the case way too much.

In Europe, there is clearly an expected gain in the plug-in industry, therefore, and this could definitely give companies an advantage in Europe, where so many have been struggling. The poor European market has hurt General Motors' sales, as it has a bigger presence there than companies like Toyota. This could make it even more powerful with the gains in the plug-in hybrid industry though, as the Prius will not be a major competitor in Europe. This is just a minor consolation to the struggling sales numbers in Europe, but it will at least assist General Motors in the future as it continues to deal with the difficult situation.

Due to the poor sales of "pure" electric vehicles and the great success of plug-in hybrids, I think General Motors has a chance to get a head start here. There will be more competition, but an early presence will give these companies advantages as plug-in hybrids become more popular in the U.S., Europe, and other places around the world.

Source: General Motors And The Future Of Plug-In Hybrids