Despite all this, Hill says it's important not to forget that certain states could continue to offer attractive incentives for fuel-efficient vehicles despite a reduction in Federal incentives. Much of it still "boils down to the will of the people in that individual state," he notes.

Based on CAR's study of hybrid vehicle sales during the last three years, the group projects an electric vehicle sales rate of roughly 120,000 units a year. That's about a 1% share of the total automobile market for 2011 to 2015.

Looking at the projections, Hill thinks California would likely account for about 25% of the electric vehicle sales, and New York and Virginia would be among the states to follow at about 4% to 5% of the sales. "The states with more incentives due to any public policy is based on who's electing the folks going into public office," Hill noted. "California is more progressive and left-leaning with politicians that like to advance social causes."

Hill thinks California's large Asian population might be another reason why the overall sales count for hybrid vehicles has been higher in California, with Japanese automaker Toyota ( TM) enjoying sales in California that are almost three times its national sales rate. Toyota is the maker of the popular Prius hybrid, which has been available to consumers for more than a decade and is a bellwether for hybrid vehicle demand.

Lithium battery product suppliers were losing ground Tuesday morning. A123 Systems ( AONE) was falling 2.4% to $4.72, Ener1 ( HEV) was lower by 0.3% to 90 cents, Valence ( VLNC) was behind by 0.8% to $1.28, Polypore International ( PPO) was losing 5.1% to $65.06, Sociedad Quimica y Minera ( SQM) was behind 0.2% to $65.33, Johnson Controls ( JCI) was falling 1.1% to $37.10 and Advanced Battery Technologies ( ABAT) was down 0.8% to $1.38.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.
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