J.D. Power Forecasts Hybrids and Diesels to be 11% of Sales in 2012
28 June 2005
A new report by J.D. Power-LMC Automotive Forecasting Services projects that hybrids and clean diesels will account for 11% of US auto sales by 2012, up from 4.8% in 2005.
The report shows that hybrids, which accounted for 0.5% of the US market in 2004, are expected to increase to 3.5% market share by 2012, while diesels are expected to grow from 3% market share in 2004 to 7.5%.
Higher gas prices are acting as a catalyst for automakers and consumers to find alternatives to the traditional gasoline internal combustions engine. We anticipate this will lead to dramatic growth, particularly with diesels, over the next several years.
—Anthony Pratt, senior manager of global powertrain forecasting at J.D. Power-LMC
The price premium associated with alternative powertrain vehicles continues to limit the potential for both hybrid- and diesel-powered vehicles, according to the report. Pratt notes that manufacturers will have to reduce this premium to attract buyers who are not currently motivated to purchase these vehicles as a means to improve the environment, or as a means to save money by consuming less fuel.
Despite the price premium, the study shows the number of hybrid electric models on the market is expected to increase from 10 in 2005 to 44 by 2012, while the number of diesel models is expected to grow from 14 to 26.
The report predicts that the bulk of growth in hybrid models will be in SUVs and midsize cars, while diesels will flourish in the pickup truck segment, as well as the luxury car and SUV segments.
If that is indeed the scenario that plays out, then the overall impact in terms of reducing fuel consumption in the fleet will be rather small.
J.D. Power participated in a study last year with Oak Ridge National Laboratory and Energy & Environmental Analysis that came to an even more optimistic projection of marketshare. (Earlier post.)
Given announced and likely introductions by 2008, hybrids could capture 4–7% and diesels 2–4% of the light-duty market. Based on our best guesses for further introductions, these shares could increase to 10–15% for hybrids and 4–7% for diesels by 2012.
The resulting impacts on fleet average fuel economy would be about +2% in 2008 and +4% in 2012. If diesels and hybrids were widely available across vehicle classes, makes, and models, they could capture 40% or more of the light-duty vehicle market.
With a current total light-duty fleet (cars, SUVs, pickups etc.) average fuel economy of 25 mpg, a 4% increase by 2012 would have us at a whopping 26 mpg.
As a new Prius owner, I wonder why it's only 11%. I'm perfectly happy with my car. I just did a road trip with a couple friends up to Yosemite (3 adults, out from LA over the Grapevine, ~300 miles) and got about 50 mpg for the round trip. We were all confortable, and had room for our stuff. I didn't push it too hard up hills, but I was doing 70 mph much of the time. Now, I understand there is a cultural and status component to any car purchase, but as a simple little car the Prius seem great to me.
BTW, it is true that the Prius costs more than traditional economy cars (mine was stickered at $22.4K), that is still below the average selling price of a new car in the USA (iirc, that is about $26K). So where is the "premium" if you are buying below "average?" I guess I look at the average, and see the Prius as inexpensive.
Posted by: odograph | 28 June 2005 at 09:11 AM
Factor in plug-in Hybrid technology which get 100+ mpg to those hybrids and it could make more of an impact.
Posted by: paul | 28 June 2005 at 09:53 AM
The 25mpg to 26mpg improvement also assumes that some of the improvements in hybrids won't bleed over to other cars. In other words, its possible that the 90% of cars that aren't hybrids in 2012 may also get improved mileage.
In the mean time, write your Congressman and ask for (increased) financial incentives for purchasing a hybrid!
Posted by: stomv | 28 June 2005 at 10:56 AM
As an owner of a 2001 VW Golf TDI, I see this article as a bit hyperbolic about the price premium of diesel motors. My car was the same price as the 2.0L gasser model in similar trim. I'm getting 47+ mpg average on soybean based biodiesel and it's completely stock.
Diesel tech is here, now, and it'll just get better once the floodgate of excellent diesels from BMW, MB, VW, and Audi is opened. Those manufacturers are largely waiting for the phaseout of the rotgut, high sulfur diesel that's sold here to introduce their best engines to the US market. That should be by Sept. 2006 when ULSD becomes federal law.
-mt
Posted by: marshall | 30 June 2005 at 11:44 AM
As an owner of a 2001 VW Golf TDI, I see this article as a bit hyperbolic about the price premium of diesel motors. My car was the same price as the 2.0L gasser model in similar trim. I'm getting 47+ mpg average on soybean based biodiesel and it's completely stock.
Diesel tech is here, now, and it'll just get better once the floodgate of excellent diesels from BMW, MB, VW, and Audi is opened. Those manufacturers are largely waiting for the phaseout of the rotgut, high sulfur diesel that's sold here to introduce their best engines to the US market. That should be by Sept. 2006 when ULSD becomes federal law.
-mt
Posted by: marshall | 30 June 2005 at 11:45 AM
Right now it seems California will let you buy a king cab 4x4 truck with diesel, on the assumption that you will be hauling something and getting better mileage than a gasoline truck. The only sad thing about that is the number of king cab 4x4 trucks I see used as daily commuter vehicles with one person on board. At the same time, I don't think we can buy those TDIs:
"Dr. Alan Lloyd, chairman of the California Air Resources Board (CARB), is responsible for California's strict emissions standards. He recently noted that the auto industry seems to be making greater advances toward cleaner diesel engines and that he would welcome sales of diesel vehicles in the state in the future, assuming they met gasoline passenger-car emissions standards." (more here)
Now, what will the future bring? Will tigher oil supplies mean that California will let diesel "passenger-cars" back in? Or will the health concerns mean that other places will follow California's lead? Time will tell.
FWIW, I like diesel engines and would happily buy a truly clean one. In them mean time though, I wish those stupid commuter trucks would get off the road.
Posted by: odograph | 02 July 2005 at 08:01 AM