General Motors vice chairman Bob Lutz sees a limited future for electric cars over the next few years, despite the automaker ramping up its Volt plug-in. He has told Reuters that most American consumers would not pay a premium and buy a car for $40,000. The price of technology would have to come down, he says. As opposed to GM lowering the price.

But then, other developments are happening that suggest a better future for the electric car. Peugeot Citroen, Europe's second biggest car maker, is now in talks with Mitsubishi about setting up a deal to build electric cars. The deal would see Peugeot taking out up to 50% of Mitsubishi, providing the company with much needed capital and would develop an electric car based on Mitsubishi's i-MiEV battery-powered model, to be sold in Europe by the end of 2010. With an equity stake in Mitsubishi, Peugeot will be in a strong position to aggressively market the car in Europe.

And then we have reports that the biggest Danish power company is now working with a Silicon Valley start-up in a $100 million effort to wire the country with charging poles for electric cars. Furthermore, the Danish government offers a minimum $40,000 tax break on each new electric car — and free parking in downtown Copenhagen. This is revolutionary stuff.

The Danish experience tells us that electric cars will only get up as a mass product with the support of governments providing things like tax breaks and rebates. That might even convince Lutz that the electric car has a future.