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Worldwide Demand for Hybrids Projected to Grow Rapidly

5 December 2006

The Freedonia Group, a Cleveland, Ohio-based market research firm, projects that worldwide demand for hybrid-electric vehicles (HEVs) will advance rapidly to 3.9 million units in 2015 and then to nearly double that number by 2020.

In a just-published study—World Hybrid-Electric Vehicles—the firm concludes that the primary markets for HEVs will remain the US, Western Europe and Japan, although it expects the rapidly growing Chinese market to experience relatively strong demand.

The study also projects that the cost disparities between HEVs and conventional light vehicles—currently between $1,000 and $3,000 per vehicle—will decline as production volumes increase.

Freedonia expects the US market to experience the highest levels of demand for HEVs, due to erratic fuel costs, the market’s unique Corporate Average Fuel Economy requirements, and the lack of significant demand for light vehicle diesels beyond the full-size truck and sport utility vehicle categories.

Despite being less cost-effective than internal combustion engine (ICE) vehicles, HEVs have carved out a niche in the US as a “carbon neutral” enabling technology. This niche in part appears to be animated by the extra cost associated with the vehicles, especially regarding HEVs that are both uniquely styled and focused on delivering superior fuel economy. On the other hand, recent attempts by some OEMs to position HEVs as high performance alternatives to pure ICEs stalled, due to unfavorable price/benefits levels.

The firm expects demand for hybrids in europe to be significantly lower than in the US, due to the penetration of light diesels (currently 50% of the total market). Demand in Japan will continue to grow, spurred by government incentive and regulation.

The report expects both China and South Korea are expected to be strong HEV markets, due to government interest in dealing with mobile emissions (China), and because local production is planned (both China and South Korea). Other regions of the world will experience lower HEV demand, according to the study.

December 5, 2006 in Hybrids, Sales | Permalink | Comments (20) | TrackBack (0)

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Comments

Here in Europe, we do have a lot of diesel cars, so diesel-hybrid would be more fit for Europe. Of course, diesel engines doens't start/stop as easy as petrol engines. Logically, serial diesel-hybrid would be the way to go then, starting the diesel engine only when batteries have lost a substantial part of their capacity. And plug-in of course...

Do market projections for 2015 and 2020 have any value?

Passenger car Diesel engine success in Europe is in large part due to the very high price of Gasoline. Nonetheless Diesel engined vehicles have to travel many kilometers a year to pay for themselves as there is a premium for Diesel Powertrains. As far as emissions are concerned they only enjoy a CO2 advantage over gasoline engines. With the requirement to clean up NOx and PM, Diesel vehicles are becoming that much more expensive for zero or negative benefit to efficiency. The cost/benefit ratio needs careful attention before one technology overtakes another.

The European driving habits on Autobahn, Autostrada etc. (Freeways) make today's expensive HEVs less attractive compared to Diesel engined vehicles. HEVs don't give better efficiency at continuous high speed driving. Real world driving depends on the driver profile. For those who do mostly city driving, HEV might be a good thing. For those who do a mix of city and highway or mostly highway a Diesel is probably better, but only for high mileage.

Combining Diesel with serial HEV makes little economic sense, since the system cost is very high for little gain over a good gasoline engine operating at best efficiency (which is the ultimate goal of a serial hybrid).

Hybrid concepts make sense but they have to satisfy customer needs. BMW seems to be taking a sensible approach in looking at systems and ways to manage vehicle energy flows. A hybrid does not necessarily have to be based on electrical power systems alone...

I pay no attention to such studies as these. If PHEVs
were on the market, you'd see an avalanche of demand. I'm
not going to settle for an HEV. No way. Economically, they suck, and aren't much better when it comes to the environment.

If PHEVs were on the market, you'd see an avalanche of demand.

They are on the market and hardly anyone is buying them.

Economically, they suck, and aren't much better when it comes to the environment.

PHEV economics are worse than HEVs.

I'm not going to settle for an HEV

No one cares.

kent, there's a show for those who have opinions and little facts, fox news, check it out

"For those who do a mix of city and highway or mostly highway a Diesel is probably better"

A prius hybrid currently rivals any diesel for fuel economy and emits lower CO2 and NOX levels, even when driven exclusively on the highway.

BMWs approach needs to do more than window dressing in regards to sustainability as a factor of driving performance

"They (PHEVs) are on the market and hardly anyone is buying them."

Name one please. (and I'm not talking about conversions)

"PHEV economics are worse than HEVs."

That would depend on the specific PHEV, the price of gas, the price of electricity and the driving habits of the individual

"No one cares."

A sentiment usually reserved for the school yard.

kent: The economics of an HEV depend heavily on the price of gas. The most critical article I have ever seen of HEV economics was done by Consumer Reports. That article later had to be retracted (in small print burried inside) when they discovered a whopping big accounting/calculation error. The HEV economics are better for small cars than SUVs.

European carmakers seem to prefer mild hybrids (10-15kW electric per 100kg curb weight) due to the superior ratio of the incremental cost/benefit. American consumers appear to have concluded that anything less than "full" means wannabe, but only Toyota has figured out how to make money on those - or so they claim. They certainly made a major investment in the technology and used it wisely as a brand marketing tool.

Diesel microhybrids (starter-alternator only) are already available from Citroen in the UK. Not sure about other countries. European diesel emissions regs are expected to tighten on an accelerated schedule now that DPFs and NOx store/SCR/AAPS (autothermal ammonia production and storage, Honda) are available now or soon. The relatively high cost of these aftertreatment systems is bumping more powerful hybrids off manufacturers' priority list for diesel technology.

Btw, series hybrids makes sense in applications that experience very high torque step changes (e.g. tanks) or low emissions (city buses). The ICE can be severely downsized and operated at or near its point of greatest efficiency continously. However, the intermediate buffering of energy in the batteries actually tends to lead to reduced overall drivetrain efficiency.

This study cites that the biggest market will be the US because of a lack of availability of light-duty diesels here in the US. Apparently, the study group isn't keeping up with headlines, which show all major manufacturers bringing light-duty diesels to the US within 3 years. Even though a hybrid diesel is a better solution, realistically, regular diesel presence in the US will diminish some of the US hybrid demand.

Name one please. (and I'm not talking about conversions)

I was. It's easy to postulate about non-existent things.

That would depend on the specific PHEV, the price of gas, the price of electricity and the driving habits of the individual

Existing options, existing energy prices. No way does a PHEV have better numbers, regardless of miles driven.

A sentiment usually reserved for the school yard.

No, just fact.

The HEV economics are better for small cars than SUVs.

Untrue.

Grup: there aren't any PHEVs on the market so it's hardly surprising that nobody is buying. On the kit/conversion side of things the hymotion kit will be on the market soon. We'll just have to wait to see if they sell.

Grup: there aren't any PHEVs on the market so it's hardly surprising that nobody is buying.

And therefore making decisive comments about their "superior economics" is nonsense. Thanks for agreeing with me.

Canadian numbers for highway driving, liter per km:

Prius 4

Civic hybrid 4

Jetta diesel 5

CVT transmission and downsized and optimized for fuel efficiency gasoline engine with Atkinson cycle contributes to good fuel efficiency of hybrids even on highway. Especially when we factor in that diesel fuel have 10% more energy per liter then gasoline.

Andrey -

in theory, a vehicle with a diesel engine ought to be cheaper than one with a full hybrid system. In practice, VW has long been burdened with excess production capacity it cannot easily get rid of due to powerful labor unions and the ~20% golden share held by the state of Lower Saxony. This increases unit production cost, as will the aftertreatment devices required to meet Tier 2 Bin 5 in the US. VW's future diesel models will have to compete hard against the Japanese hybrids in terms of both TCO and initial quality in the compact and mid-size car segments, especially since diesel in North America does not enjoy the large per-BTU tax advantage over gasoline it does in most of Europe.

Btw: the permanent electric-mechanical CVT used in e.g. the Prius is actually fairly inefficient in highway cruising, compared to a purely mechanical transfer path. That is why GM/DCX/BMW are working on their two-mode hybrid. However, Toyota's aggressive downsizing plus Atkinson cycle overcompensate for the inefficiency of the transmission, at the expense of more moderate acceleration performance at high speed and hill climbing.

Rafael;

Agree. VW is way overpriced here and does not represent state-of-the-art European diesel technology.

GM/DC/BMW two-mode transmission is widely used in buses, and smaller variety will hit showrooms in 2007 for full-size pick-ups. Even smaller have been developed for big luxury sedans with rear wheel drive, but not for smaller passenger vehicles. Pity, it is marvelous engineering creation.

Andrey -

I'm not sure VW's diesels are not state of the art. Sure, they still use unit injectors but that's because of a deliberate decision by VW's board to use both that technology and common rail (in Audi engines) until the technology shakes out. For a long time, unit injectors delivered higher pressures (= lower PM) than common rail, at a lower price tag. However, the latter has advanced to the point where its primary advantage - soft-coding of injection events - has led the VW side of the house to switch to common rail for new engine designs about 18 months ago.

The pricing issue is exacerbated by the unfavorable exchange rate.

Rafael:

VW sells only one TDI in Canada: 1.9 liter 8 valve 100hp @ 4000 RPM. Does not impress me much.

Andrey -

that's one of their trusty older designs. In Germany, they sell the Jetta with more engine options, including a 2.0 liter 16V diesel delivering 125kW/200hp. They also offer the DSG dual clutch transmission.

I suspect the Canadian market is too small for them to maintain a wide range of options. Perhaps that will change in MY2008, when the first T2B5 diesels are supposed to hit the US market.

When petrol is rationed to 10 litres a week, as happened in Russia when the economy collpased, terms like "economics" will cease to have meaning.

Then the car that will give you mobility without or for minimal pterol will be useful while your "cheaper" truck etc will be scrap metal.

As Kjell Aleklett keeps tryiny to drum ito people's fixed mental maps - MOney does not make the world go round. Energy does.

You cannot put dollar bills in the petrol tank. Rig up a wood carved propellor onto a second hand car alternator and you have free electricity - how's your scrimshaw?

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