Cars could be the thin end of the wedge for a modernizing electricity sector.

The move to electric cars and electric hybrid vehicles in the US has been slow, but the comparative popularity of new models being offered by mainstream automakers on a broader scale are raising the profile of vehicles and mobility as a mechanism for updating the swiftly-aging US power grid.

Volkswagen
said today it would launch its XL1 two-seater, a plug-in electric hybrid vehicle that can be recharged from a conventional household electric outlet.

“Future mobility is one of the most stimulating topics of our time,” Volkswagen said in its announcement. “The key question here: Just how much could the energy consumption of cars be reduced if all the stops were pulled out for efficiency.”

The car’s release in the US market is part of a broader push that involves a broadening of the German automaker’s “Think Blue” environmental and sustainability corporate initiative and the opening of a new factory in Chattanooga, Tennessee that Volkswagen calls “one of the greenest automotive factories in the world.”

Amid sustained oil price volatility that translates into unpredictable prices for gasoline, interest in electric and hybrid cars has been a feature of the recovery in US car sales over the past year. A total of 104,333 hybrid, extended-range and battery cars were sold in the first four months of 2011, up from 80,235 in the same period a year ago, according to the Electric Drive Transportation Association.

The popularity of car ownership in the US has been repeatedly cited by advocates of smart grid technology as a mechanism to broaden public acceptance for significant investments in upgrading transmission infrastructure. Electric cars require distributed and upgraded electricity delivery infrastructure, and utilities say that to avoid overloading the grid new price-response rules will need to be integrated at the domestic level, encouraging people to charge their cars overnight when other power demand is low.