I agree with this, though I see it happening somewhat later in the process than you suggest given the sucky energy/weight ratio of batteries (my best guess is that in small to medium depletion scenarios, nuclear power and plug-in hybrids will prove to be the path of least resistance that the market picks, with the plug-in part getting more and more significant over time).
If you think batteries are inadequate, take a look at lithium-ion performance figures.  AC Propulsion did, and they made an electric rocket-car that can go almost 300 miles at freeway speeds.

The problems with Li-ion batteries will be overcome.  The expensive and runaway-prone cobalt oxide cathodes are eliminated by Saphion technology, and nano-fine structures by Altair Nanomaterials and Toshiba have radically increased the cycle life and charge/discharge rates.

I believe the Toshiba battery represents the true breaktrhough in EV technology. I'm surpries it received as little publicity as it did. Is there any reason to believe this batery will fail to live up to its promise? Is it too expensive.

For those who aren't aware of Toshiba's breakthrough in battery technology, here's the link:

http://www.toshiba.co.jp/about/press/2005_03/pr2901.htm