Ford Motor Co. CEO Alan Mulally agrees with a new study by The Boston Consulting Group that says widespread proliferation of electric vehicles over the next decade is unlikely, due to high battery costs.

“When $7,000 to $12,000 of the car is for a battery, (improving) batteries is absolutely the key if we want to move to electricity,” he says during the North American International Auto Show here. “(Batteries) have to be smaller, they have to be lighter and they need to be more robust for operating in cold and hot temperatures.”

The study, released last week, projects fairly healthy demand for EVs – 26% of the global market, or 14 million units annually – in China, Japan, the U.S. and Western Europe by 2020.

But the study says only 1.5 million vehicles of that total will be fully electric and another 1.5 million range-extending EVs, such as the upcoming Chevrolet Volt due late this year. The remaining 11 million will be a mix of hybrids.

Meanwhile, the White House is urging auto makers to put 1 million EVs on U.S. roads by 2015.

Ford plans to launch an electric version of its Transit Connect light-duty van this year, followed by a Focus EV in 2011. A plug-in hybrid and next-generation hybrid-electric vehicle in 2012 also are planned. The auto maker Monday announced the PHEV and next-gen HEV will be built at its assembly plant in Wayne, MI.

While pricing for the upcoming EVs has not yet been revealed, they’re expected to sell for thousands of dollars over their internal-combustion counterparts.

The Boston Consulting Group study concludes battery costs will remain too high unless a “major breakthrough” in technology is achieved, an assessment with which Mulally agrees.

“It’s fundamental enabling technology, and you never know where the breakthrough is going to come from,” he says. “But when you invest and you have a consistency of purpose, like we have done with the internal combustion engine, you’ll find new solutions.”

Mulally says Ford also remains bullish on hydrogen fuel cell-powered vehicles, but like EVs, HEVs and PHEVs, technological breakthroughs must occur for the cars to be production feasible.

“Hydrogen is a very compelling alternative, too, but we need to make a breakthrough on the fuel cells in addition to the batteries,” Mulally says, noting a hydrogen refueling infrastructure is also needed.

‘We know how to make dynamite vehicles. It’s the enabling technology we have to keep a laser focus.”

bpope@wardsauto.com