Pessimism inside the global electric gamble: Almost every motor company on the planet is eager to get electrified models into their showrooms, and the profit on their struggling balance sheets. So are thousands of smaller companies that supply parts to the carmakers, not to mention the mostly cash-strapped countries in which they are headquartered, seeing these vehicles as the vanguard of new, economy-leading industries. One might think it early to judge how the market will respond, yet industry insiders -- perhaps shell-shocked from their recent woes -- are already worried (see this excellent piece at Chemical & Engineering News. Subscription required).

Let's look at the fleet, which is divisible into three distinct groups: There is Nissan, whose colorful CEO, Carlos Ghosn, reckons that the world's motorists want an all-electric vehicle, such as his Leaf (or the new Tesla X, pictured above). Toyota leads the second group, and suggests that Ghosn is nuts -- drivers want only a dash of electric when they drive, says the Japanese company, which is offering cheaper, gasoline-propelled vehicles such as the Prius that benefit from a push from comparatively large batteries. The third group is typified by General Motors, whose plug-in hybrid Volt goes both ways, featuring a 40-mile battery and a backup gasoline engine with a 260-mile range.

So which has made the best bet? As suggested above, disheartened industry insiders, gathered in the Florida city of Orlando this week, think the answer may be none of the above, at least not at high sales volumes. Electrified vehicles are currently serving only a niche, "and that's probably all they're ever going to be," David Raney, a former executive of Honda Motors and now a Santa Barbara-based consultant, told me at the Advanced Automotive Battery Conference. Why is this so? The answer is one word, say these hands -- cost. A few wildly successful merchants manage to charge a premium -- Starbucks and Apple come to mind -- but makers of electrified cars are not currently among this starred group. Motorists by and large have not proved willing to fork over up to $10,000 extra for an electric car or a plug-in hybrid.

Go to the Jump for more on the electric car race, and the rest of the Wrap.

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When one technology sees a rival coming over the hill, it does not ordinarily just lie down and surrender -- clunky cigarette-box-shaped cell phones persist  despite the feverish popularity of the smart phone, for example. So it will be with electric-propelled vehicles. Plug-in hybrids look likely to start small, then make a serious dent in the vehicle fleet in the 2030s -- forecasters think that half to 70 percent of new vehicles sold in 2030 in China will be electrics of some sort. But that does not mean the disappearance of gasoline-driven vehicles -- makers of vehicles using the internal combustion engine are already cooking up devilish upgrades now that they see competition nipping at their heels.

The latest rollout in this devilish category is Ford, which next year will roll out a gasoline-propelled Focus in Europe that it says can get 69 miles per gallon. How does this Focus (race car version pictured above) do so? By downsizing the engine to three cylinders, reports the London Independent.

It is interesting how efficient a car can become -- and how overall oil demand can plummet -- when the factor of economic extinction comes into play. BMW has unveiled a concept car called the i8, also featuring a three-cylinder engine but in this case hedging its bets -- this is a hybrid vehicle with a battery that alone can take the car for 20 miles.

These are all signs of an industry undergoing a fundamental shakeup. In a way it is simply back to the future, writes Rohit Jaggi at the Financial Times, who notes that Porsche unveiled its first hybrid electric in 1900.

Look for the makers of gasoline-driven cars to dig in their heels with greater and greater efficiency. But the result of that seems likely be more robust plug-in hybrids. This blog has noted that it will be difficult for pure electrics to gain wide popularity since range-anxiety will persist, but the same does not hold for plug-in hybrids, which will calm nerves with a back-up gasoline engine. Even I am being forced to give up my clunky cellphone.

We continue to see new critical rankings of the top electric and plug-in hybrid vehicles, but the truth is that these models so far are selling at best in the low thousands and more often in the hundreds (the new French-German Mia pictured above). So neither the U.S. nor Chinese are likely to achieve their competing goals of 1 million such cars on their respective roads in the next few years.

This is not surprising -- it is simply the air starting to go out of the hype. So what truly does seem likely in the coming years? Read on to the jump.

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The Kremlin Contest: Perusing the first week of entries in our friendly, low-risk wagering contest for who will be Russia's next president, I've discovered that I am not alone: Many conclude that Vladimir Putin will step aside and permit Dmitry Medvedev to remain Russia's president. But where are the Putin bettors -- the multitudes who are sure that Putin will return to the Kremlin in elections next year? Get your bets in: You must name who will be president, who will be prime minister, and the date on which Putin will disclose his choice. You must also name your small, non-cash wager (one contestant has wagered a shot glass; I have wagered a glass of Rioja). Remember that, if you lose, you must mail your wager directly to the winner. You can use the email link in the "About this Blog" box on the right, or my twitter address: @stevelevine. The deadline is Sept. 1.

When oil is next door: On paper, the gasoline-guzzling United States has no oil scarcity problem. To the south, Venezuela has 211 billion barrels of oil reserves, second only to Saudi Arabia. To the north, Canada's Alberta province possesses a conservative estimate of 175 billion barrels of oil. At home, there are the newly prolific volumes of the Bakken and Eagle Ford oil shales, and new plays in the Gulf of Mexico. So why do Americans fret about the supposed peaking of oil? Because of geopolitical, environmental and self-imposed impediments that keep these enormous volumes at arm's length.

Alberta  is the piece of this picture that's on my mind today. Chip Cummins and Edward Welsch weigh in with a long, page-one piece in the Wall Street Journal on the province's long, grueling campaign to persuade its southern neighbor -- the United States -- to accept a near doubling of current oil exports to 1.1 million barrels a day, and more down the road. The hang-up is that the crude comes from oil sands (pictured above), which get a lot of Americans riled up because of the pollution created during production and refining.

The worries about oil sands have led Alberta and the companies working there to try to make the sands more environmentally acceptable. For instance, unlike shale gas drillers in the United States, who all-but refuse to police themselves and go transparent, Alberta has adopted a pro-active carbon offset program. They say that, all in all, oil sands are now no more polluting than almost any other form of oil drilling.

Over at Time, Tara Thean asks validly whether new doubt is cast on Alberta's plans to pipe more oil to the United States because of a fresh oil spill from an ExxonMobil pipeline in the Yellowstone River. Alberta will have to respond. But if it does -- which one imagines it will -- U.S. environmentalists ought to reconsider their opposition to this expanded oil flow. Hydrocarbon developers have little incentive to repent if environmentalists demonstrate no capacity for compromise.

Read on for more of the Wrap

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For electric cars, a long battle: A misunderstanding about the international electric-car race -- the rivalry for domination of a possibly gargantuan market for electric cars and advanced batteries -- is that the winner will be known soon. It's clear why people would so conclude -- so much hoopla has surrounded the launch of the Volt, the Tesla, the Leaf and other models that the international contest looks a bit like the U.S. Open. We only wish we knew now which one is Rory McIlroy (pictured above). But does this perception conform with other recent examples of big technological adaptations? Not really. Even in our super-charged, accelerated world, laptops took 15 years of scaling up and pricing down before embedding themselves popularly, and cellular phones have been the same. By that measure, it will be the second half of the 2020s before electric cars are a significant part of the highway traffic.

In an upcoming study, the Boston Consulting Group, a management consulting firm, forecasts that electric cars will make their biggest splash from 2035 to 2050 (autonews.com helpfully posted a draft copy of the study). While no one can reliably forecast consumer taste one way or the other, this outlook seems a reasonable dart-throw. Of course, we are talking pure electric vehicles -- when you add in hybrids, penetration will be much faster. The reason is that both manufacturers and consumers are going to be thinking flexibility -- it will be prudent to have hybrid capability. Yet one reason the climb will be long is not just the height of the bar -- making models that travel far enough before requiring a recharge -- but the requirement to beat out gasoline-driven rivals, which for competitive reasons are bound to become far more efficient, as Jeff Bennett writes at the Wall Street Journal.

Read on for more of the Wrap.

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Saudi Turnabout on Egypt: When geopolitical chess players observe the uprising in Egypt, they don't see Egypt and Hosni Mubarak, who has now stepped down from power. They see Saudi Arabia and the rest of the big Persian Gulf oil producers, and the question mark of whether they are immune to the Tunisian Contagion, the popular uprising ignited by the ouster of Tunisian President Bine Zine El Abidine Ben Ali (who incidentally received refuge in Saudi Arabia). After all, Saudi Arabia alone produces 10 percent of the world's oil supply, and through its ability to produce a few million barrels a day on top of that singularly influences whether or not oil traders go into panic.

It turns out that the Saudi regime sees the same thing. So in recent days, the kingdom toned down its categorical support for Mubarak's continuation as president, reports Abeer Allam at the Financial Times. Specifically, Allam points out the recently more measured reporting on the Egyptian events on Saudi-owned al-Arabiya TV. Allam quotes one expert close to the Saudi regime: "They do not want to be seen as against the [Egyptian] people."

Meanwhile one wonders at the role of the Egyptian Army in edging Mubarak out. In recent days, Mohamed ElBaradei, the Nobel laureate and former international arms inspector, called on the Army to step in and stave off a situation that he says may otherwise "explode." This was almost certainly an ElBaradei blunder -- one  thing a popular uprising does not want is a record of reliance on military force, because, historically speaking, once an army senses it's responsible for a fellow or movement being in power, it cannot resist later issuing reminders of it in the form of requests (read: demands) for more power and privileges.

In Tunisia, Ben Ali left in the face purely of the popular uprising. In Egypt, the uprising in Tahrir Square was the technical cause of Mubarak's abdication. But if it was the Army that ultimately pushed him out -- with the request of the uprising's leaders -- the opposition may come to regret it.

Egypt and oil prices: No sooner did Hosni Mubarak step down then oil prices continued their slide of recent days. Immediately, prices dropped to about $86 a barrel in New York. The price of U.K.-based Brent crude, traded abroad, continued its very strange, unanchored trajectory upward; one presumes that later today European traders will realize that there is still a glut in global oil.

Whatever the case, at least for now we are looking at stable oil prices in the $80-$100 per-barrel range, more toward the lower end. The Paris-based International Energy Agency continues to remind us that global demand continues to rise, so that supplies are becoming tighter. But that is to worry about next year.

Grandiosity on the Silk Road: At Oil and Glory, we keep receiving emails from current and former U.S. diplomats unhappy with our skepticism about a plan to turn Afghanistan and all the surrounding nations including China, the former Soviet Union and South Asia (excluding Iran of course) into one, big, happy Silk Road family. The people suggesting this idea, meaning a spider's web of interconnected electric lines, roads, energy pipelines and other projects, believe possibly rightly that only trade and infrastructure -- a connection with the rest of the world in every direction -- will ultimately bring peace to the region. Their most recent announcement is a two-lane, U.S.-financed highway straight through the militant stronghold of South and North Waziristan in Pakistan's trial belt, abutting Afghanistan, reports Matthew Green at the FT.

Is this region truly ready for expensive infrastructure projects imposed from the outside that they themselves cannot -- according to the people sending me emails -- plan, build or manage themselves? How about some food for thought -- yesterday in the Pakistani city of Quetta, near the Afghan border, Baluch rebels for the second time in a week blew up the biggest natural gas pipeline in the province, leading to the Pakistani gasfields at Sui. Virtually all the trans-Afghan pipeline plans I've seen call for transit through Baluchistan. So do the trans-Afghan road networks. Are these Baluch on board with you?

More food for thought: China meanwhile is again going where the West fears to tread. It has agreed to build $13 billion in railroads in Iran, Reuters reports.

Over at Registan, Josh Foust has his own doubts.

In an interview with the Wall Street Journal's Sebastian Moffett and David Pearson, Renault CEO Carlos Ghosn suggests that it comes down not to specific evidence of why the trio had Swiss bank accounts, the proceeds of which were allegedly traced to China. Instead, Ghosn said, there was an unacceptable risk that, given the allegations of an appearance of financial impropriety, he could not gamble that they had divulged secrets, for example, on the cost of Renault's battery.

Ghosn said: "The most interesting information I can have about a competitor is the cost. For a battery, the most important element is the cost per kilowatt. From the cost per kilowatt, I may guess what kind of technology you're developing."

With the push of oil prices up up up, we are seeing genuine security threats -- food prices going through the roof and populations thus endangered. Then there are the crises-of-convenience that also hew closely to the price of oil, but are actually public relations exercises. Interestingly, this time airlines are not predicting their imminent demise, but instead say they have learned from the past and are hedged for survival and even profitability with even $100-a-barrel oil, Linda Loyd reports at the Philadelphia Inquirer. The automobile industry is another story -- U.S. carmakers, only recently rescued after decades of losing market share to forward-thinkers abroad, are again suggesting that if they are forced to produce fuel-efficient vehicles, well, they just might not make it. Pass the Kleenex.

In Detroit, the North American car industry's annual auto show is under way in an ebullient atmosphere, with carmakers from around the world elated over their sales numbers and revived future. New luxury models are among those unveiled, in addition to well-considered concept vehicles meant to cash in on forecasts of oil-price spikes. Chrysler, for example, suggests boosting the number of gears in its automatic transmission to nine from the current five for a 25 percent increase in fuel efficiency, writes David Sedgwick at Crain News Service. China's BYD, Toyota (Prius), and Ford all talk of their new electric and plug-in cars, David Bullis reports at MIT Technology Review.

Against that backdrop, American carmakers -- as they did in previous decades in protest of calls to improve efficiency -- have gone to Washington arguing that they simply cannot meet a 15-year goal of creating 62 mile-a-gallon car and truck fleets. And if they do, the price will rise so high, they won't sell enough to stay in business, Josh Mitchell writes at the Wall Street Journal. Cars could cost $6,400 more and drive down sales by 25 percent. (Once one accounts for inflation, is a 21 percent price increase on a $30,000 car over a 15-year period egregious?)

Others have asserted public-policy arguments for higher fuel efficiency. Less oil use means a better balance of trade: If you strip out oil imports in the most recent reporting period, for example, the United Kingdom's import-export balance would have shown an improvement rather than the worsening that did appear, Emma Rowley reports at the Daily Telegraph. More efficient vehicles would instantly boost the United States' ability to meet CO2 emission- reduction goals.

But what about the simple matter of competitiveness? Toyota is busy branding itself in the efficiency space by trotting out a whole line of Priuses, Hybrid Cars reports. Renault and the whole country of France are preparing to file an intelligence case today against a trio of scientists who may have passed on highly strategic electric-car secrets to another country, said to be China, Reuters reports. (Update:Renault today filed a criminal espionage complaint that does implicate a Chinese firm, the State Grid Corp. of China, in allegedly making payoffs to two of the three Renault employees, reports Bloomberg.)

Yet in the United States, we see the Alliance of Automobile Manufacturers arguing that carmakers must be permitted to churn out gluttonous vehicles. I wonder, however, if we are seeing a version of the airline industry's hedging strategy -- carmakers may be seeking flexibility in Washington, first and foremost because, with a new Republican surge, they can. In actuality, however, as Bernard Simon writes in the Financial Times, carmakers are fairly cheerful regarding the financial potential of their new fuel-efficient fleets.

Caution is advised. One cannot ignore the Jevons Paradox, for instance, which argues that more fuel efficiency could result in more gasoline use because people might drive more, writes Edward Glaeser. In addition, there are winds blowing the other way -- Americans are still buying large vehicles. Simon writes:

Demand for big pick-up trucks has been unusually strong in recent months, accounting for 13 per cent of US industry sales in December, the highest in almost three years. According to a survey published by Consumer Reports, an independent consumer watchdog, only 28 per cent of car buyers cited the environment as an important factor in their choice of vehicle, down from 40 per cent in 2008.

Yet, gasoline prices will not drop back down to $2 a gallon anytime soon. And that is apparent in Detroit's move to reduce its reliance on gluttonous vehicles. Do not weep for Detroit quite yet.