WAYNE, Mich. -- Is consolidation or expansion the future of the car industry?

It's an interesting debate. One one hand, Saab is flirting between life and death at the moment.

On other other hand, in the last five years a proliferation of brands – Tesla, Fisker, Aptera, Coda – have emerged and some Chinese manufacturers are trying to go global with their low-cost cars. Moreover, customers seem excited: Think has 2,300 people on a waiting list for its electric town car. New brands are a definite possibility.

Bill Ford Jr., Chairrman of Ford (still confirming any family relationship), was asked that question at a briefing last week. He recalled a project he worked on 25 years ago at the company in which strategists tried to paint a picture of the auto industry.

"We concluded that there would be six auto manufacturers: two in North America, two in Europe and Two in Asia," he said. "That wasn't exactly right. There are more companies today than there were then."

Then again, producing cars is a big company, industrial sort of activity. Ben Rosen, one of the most successful VCs in the early days of tech, tried to break into the car business with Rosen Motors in the 80s. Didn't work out.

One big stumbling block looming for start-ups is crash and safety testing, predicted Gunnar Herrmann, director of the Global C Platform.

"When this happens in 2012 and 2013, we could see a clearing rain," Herrmann said.

So stay tuned.

Toyota today announced that it would sell plug-in hybrids and short-range electric vehicles to consumers in 2011. It hopes to sell tens of thousands globally a year, executives said.

It's an interesting flip. Barely more than a year ago, Toyota executives talked about electric cars, but the enthusiasm was pretty tempered.

"Lithium-ion batteries will probably be used in vehicles, but we still have problems," said Masatami Takimoto, the executive vice president in charge of technology, citing cost, safety and energy density. He was a bit more enthusiastic about fuel cells and biofuels. Check out the PowerPoint slide on that link. "We at Toyota believe that plug-in hybrids are the most practical way for an ordinary vehicle to take advantage of electricity," he added.

So why the switch? Unlike some U.S. automakers, Toyota doesn't fight trends. The excitement surrounding the Nisan Leaf, the GM Volt and the Tesla Roadster all strongly indicate that consumers want electric cars. Toyota also did quite well with the Prius, which travels on electric power generated by the motor. Rather than sit back and lose the advantage, it is moving forward.

Tesla Motors gave us the Sport edition of the 2010 Roadster for an afternoon, now here's the video.

Like most people that get behind the wheel and don't have to plunk down the $128,000 plus on the purchase price, we loved it. It handles well, accelerates rapidly and nearly everyone stares when you come to a stop at the intersection. We also had a few people try to race us. In terms of acceleration, nothing came close. We let a guy in a Mustang pass us, but that's only because I am a terrible driver and didn't want to go past 85 miles an hour. It took him a long time to overtake us too.

One of the more interesting aspects of the car is how the company is trying to blend sedan comfort with sports car zip. The company has discovered that many consumers now use it as a daily commuting car. Thus, it inserted expanding pellets into the doors to reduce sound. That way you can take conference calls. The Sport can do zero to 60 miles per hour in 3.7 seconds, or faster than the 3.9 seconds it takes the regular Roadster. Firmware included in the car's system also optimizes the acceleration. The firmware, which comes in the Sport, is probably the biggest difference between the older and the newer Roadster. (We drove the Roadster Sport.) Between zero and 20 miles an hour, it moves fairly fast, but once it hits 20 the acceleration climbs. The first time you gun it, you get thrown back in your seat at the 20 mile per hour mark.

And don't worry about charging. Costco and other places are installing free electric charging stations.

Tesla Motors is preparing to move forward with an IPO, according to unidentified sources at Reuters.

There is no S-1 on file right now, according to the SEC's website, but that would be the first step.

Many have waited for Tesla to start moving on an IPO. It is one of the most visible green companies and, with its loan from the government, will likely be able to fulfill its ambitions of bringing out a sedan in a few years.

The A123 Systems IPO likely had an effect as well. A123's stock zoomed up the first day of trading and sparked hopes that more would follow. (A number of people, in fact, sent Musk news articles on the A123 IPO the day it occurred, I'm told.)

Of course, not everything goes as planned. Although A123 nearly hit $20 on the first day of trading, it is now wallowing around $15. The company went out at $13.50.

Battery cost – that single factor will likely determine when and how fast cars move from gasoline to electricity. Driving range and charging infrastructure are two problems that will likely take care of themselves: Consumers will lose range anxiety when they realize they have another car that they can take to Disneyland and lose interest in public charging stations when they realize they don't need many of them.

But battery costs directly impact car costs and hence the attractiveness of electric vehicles to consumers.

The short answer? It costs about $250 a kilowatt hour to produce ordinary lithium-ion cells for laptops, said Mark Duvall, an analyst at EPRI at a greentech breakfast sponsored by the SD Forum this morning. Making lithium-ion packs for cars cost more: Automakers have strict safety and performance standards. The general consensus is that lithium-ion packs for cars cost around $900 per kilowatt hour. General Motors, though, has strongly hinted that it is closer to $500 a kilowatt hour than the $1,000 mark, Duvall said. The Volt has a 16 kilowatt hour battery, so the battery costs about $8,000. The Volt battery, he added, also is overbuilt: It is bigger than GM needs for the car to do 40 miles on a charge. A supersized battery, however, gives the battery more charge cycles.

Ultimately, the price of batteries will approach the cost of manufacturing, he said, and many expect manufacturing prices for batteries to decline as volumes pick up. Ergo, batteries could get somewhat cheap in the next few years, if Duvall is right. Then again, improving battery technology has historically been tricky. There is no Moore's Law for batteries that allows performance to double every two years. It takes about ten years for performance to double.

Other notes at the event:

• Both Duvall and Marianne Wu of Mohr Davidow Ventures said that power prices will inevitably rise due to scarcity of resources, the influx of renewables and other technical and macroeconomic issues.

• "Consumers don't understand that the cost of energy is just going up," Wu said, adding that consumer expectations are "out of whack" with current trends.

• Creating green jobs also may not be easy. Solar installation jobs will be based in the U.S. but it's an open question how to bring solar manufacturing to come to the U.S.

ActaCell has received a promise of $1 million from the state of Texas to boost its development of longer-life lithium-ion batteries.

To be specific, the Austin, Texas-based startup said Tuesday that it had secured $250,000 in pre-seed funding from the Texas Emerging Technology Fund.

The remaining $750,000 awaits further proof that the company's technology, licensed from the University of Texas at Austin, is ready to be scaled up into commercial production, CEO Bill Ott said Tuesday. The company expects to deliver that by mid-year, he said.

ActaCell, founded in 2007, already raised $5.8 million last summer from investors Google.org, DFJ Mercury, Applied Ventures and Good Energies (see Funding Roundup: VCs Bet on Electric Rides).

Its goal is to deliver a longer-lasting lithium-manganese battery – the chemistry favored by such automakers as Nissan and General Motors for their plug-in hybrid and electric vehicle applications because of its ability to withstand higher operating temperatures (see In Batteries, Will Tesla Stand Alone With Cobalt?)

Without getting too specific, Ott said that ActaCell was "working to harden the material in the cell" so that it could be discharged and recharged more often, increasing what's known as its cycle life – a key consideration for batteries that are supposed to last for years.

The new round of funding will help the company hire new managerial and technical staff, with a goal of bringing full-time employees from five today to about 12 by mid-2010, Ott said. At the same time, the company would continue to make demonstration battery packs using its chemistry with an eye toward proving their commercial promise, he said.

Just when ActaCell might start mass-producing, Ott couldn't say. The company had been a partner in the so-called National Alliance for Advanced Transportation Batteries, which did not receive the up to $1 billion in stimulus funding it had sought from the Department of Energy to build a U.S. battery plant (see Green Light post).

Absent that funding, "We clearly need a manufacturing partner," he said, though he didn't name any such potential partners.

Project Nina, the $39,900 plug-in hybrid for upper middle class families, from Fisker Automotive will start moving into production in 2012, thanks to a deal that will allow Fisker to take over a General Motors plant in Delaware.

Federal stimulus dollars have paved the way for Fisker to get the plant. Fisker will come out with its first car, the almost $90,000 Karma, next year. Earlier, it had hoped to come out with the Karma this year, but it's the electric car industry, people. Delays are endemic.

Although very few electric cars are in production today, the Nina will come out in a market that will be increasingly crowded. By then, Nissan, General Motors and Ford will have released, respectively, the Leaf (2010), the Volt (2010) and the Focus (2011) and Ford will be ramping up for a plug-in hybrid too. Many other Japanese manufacturers and some South Korean will likely have cars out then too.

And then there is arch rival Tesla Motors, which says the $57,000 Model S comes out in 2011. Panasonic will make the batteries for the Model S.

Granted, plug-ins, hybrids and all-electrics will only constitute a fraction of the market by 2012. Hybrids now account for 3 percent of new car sales and by 2020 it should rise to 10 to 25 percent. Still, The Nina won't be the only plugger in the showroom. Good news for consumers, but it makes it tougher for Fisker.