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Mixed Outlook for Mainstream Consumer Adoption of PHEVs

Bubble chart of plausible mainstream PHEV buyers’ battery requirements (light and dark gray circles) and experts’s requirements overlaid on a Ragone plot of NiMH and Li-ion batteries. Source: Ken Kurani. Click to enlarge.

A series of presentations at the SAE 2009 Hybrid Vehicle Technology Symposium held in San Diego (11-12 February) sketched a mixed outlook for mainstream consumer—i.e., not enthusiast or pioneer—adoption of coming plug-in hybrid electric vehicles (PHEVs), given current market conditions and consumer awareness and attitudes.

The findings from the studies suggest that manufacturers will need to be careful in balancing the design of all-electric range capability against a number of other factors; that competition from alternative solutions will be stiff; and that mainstream consumers still do not place the highest values on fuel economy or low emissions when purchasing a new car.

Dr. Ken Kurani from the UC Davis Institute of Transportation Studies (ITS) presented results from the latest in a series of electric drive consumer studies seeking to learn from consumers whether or not PHEVs are a good idea.

“Consumers right now, given the opportunity to manipulate the idea of a plug-in vehicle, are designing not only very different vehicles, they are designing vehicles that are much more possible than the experts are assuming.”
—Ken Kurani

The ITS study worked with a national sample of households representing a plausible early market for PHEVs—households with a high potential for physically recharging—and enrolled them in a design game.

Among the study’s findings was that the majority of participating households designed a PHEV with much lower all-electric capabilities—and hence battery requirements—than automakers or experts are working with. Based on the game results, battery pack requirements would be equal to or less than 2 kWh.

New car buyers are not like pioneers, advocates and experts, Kurani noted. The Most Plausible Early Market consumers value fuel economy. The most frequent designs resulting from the game include higher charge-sustaining (CS) and charge-depleting (CD) blended operation—few valued all-electric range. All-electric driving may not be a bad idea for consumers, Kurani noted, it is just one that they don’t yet value or understand.

Questions for the industry, Kurani said, include how do we get from where households currently are to where PHEVs provide the most benefit? How to provide households with an opportunity to create value for electric driving? Which cars should be built when? And which should have incentives and when?

A trajectory through time of PHEV designs allows good things to happen. It allows us to start with batteries within lithium. It allows supplier and manufacturer cost reduction through multiple product generation. It allows more consumers to buy some electric driving sooner, and thus to experience and form value for electric driving.

—Ken Kurani

In a talk on gauging the competition between advanced vehicle powertrains, Steven Plotkin, staff scientist with Argonne National Laboratory’s Center for Transportation Research struck a slightly more pessimistic note in describing results of Argonne’s Multi-Pathways Transportation Futures Study.

“What may look like an attractive technology to a society can look pretty crappy to a consumer.”
—Steve Plotkin

What looks good against today’s conventional car may not look so good against tomorrow’s conventional car or tomorrow’s hybrid, Plotkin said. The competition against PHEVs in 2030 is likely to incorporate a radically downsized, boosted direct-injection engine; an automated manual or 7-8 speed automatic transmission; advanced tires with CR at 0.006 or below; a 30% weight reduction on the glider; advanced aerodynamics with CD of 0.22 or below; advanced accessories; and a mild hybrid drivetrain.

That could yield more than 50 mpg of fuel economy—or usage of less than 300 gallons per year—and still be a lot cheaper than a plug-in hybrid or a fuel cell vehicle, he noted.

“Congress should not pick [vehicle technology] winners—policymakers have a hard time being neutral. Our history with alternative fuels has been truly awful.”
—Steven Plotkin

There are large number of significant unknowns in terms of evaluating the success of future drivetrains, he said, including the future price of gasoline (“the most important thing”); what people think the future price of gasoline will be; future attitudes about climate change and energy security and what the government is willing to do about them; future technology progress; and how consumers will respond to new technologies.

We saw a horrible drop in vehicle sales last December [down] 36%. Hybrid sales 43%. A recent poll by the Pew Center found that global warming was the last...the last...of 20 concerns. A Rasmussen Reports poll show that 41% of the US public thinks Mankind is causing global warming...Are desires for more power, more luxury, more size reaching saturation? Recent trends say no. Research shows that people value loss of dollars a lot higher than value gained, about 1.5 times as much. People are more worried about losing than they are happy to gain...what that means is that there is a lot of uncertainty.

Given high initial costs, volatile oil prices, improving competition, an industry in poor financial shape and consumers who aren’t perfectly rational...who actually are quite risk averse...advanced technology may be a hard sell. Expect mostly incremental change unless the market is helped, or unless technology progress surprises us again.

—Steven Plotkin

Scott Miller, the CEO of research firm Synovate, also noted that while “things don’t look so good” for the auto industry right now, hybrids and plug-in hybrids are still favored by consumers against other advanced fuel-saving technologies.

“...the first time in your entire lives you’ve ever heard the EPA and the OEMs agree on something: tax the fuel. Start talking about more than just climate change. Let’s talk about water quality, local emissions, natural resources and the wars that come from places that don’t have enough natural resources. Tax the fuel.”
—Scott Miller

He also noted that their research shows that fuel efficiency is the number 12 reason for buying a car and that environmental friendliness ranked 38. Mainstream adoption by new car buyers depends on connecting with more important criteria such as reliability and durability, he said.

Consumers in the US have been spending money they don’t have, he noted. The net effect of correcting this problem will be pressure on purchase prices first and operating costs second. The industry needs to “accept the fact that the correction to the situation is that people are going to spend less, and buy less frequently.

Miller stressed that it is important to recognize that hybrids are still favored by consumers, and that is important that automakers not start behaving like they don’t believe in the future of the technology.


  • Jonn Axsen and Kenneth S. Kurani (2008) The Early U.S. Market for PHEVs: Anticipating Consumer Awareness, Recharge Potential, Design Priorities and Energy Impacts (UCD-ITS-RR-08-22)



Very good and interesting article, and the conclusion is straight and clear, if US want to be serious about reducing oil addiction and CO2 emissions, one solution : Tax fuel. that's not a surprise to me at all, tax fuel works better than anything else and it is widely accepted by experts (including the CEO of Ford and Shell...). It is a deceptive and foolish illusion to believe that giving incentives to buy fuel efficient cars will make people buy them as long as the gaz price is low. You will just force automakers to build cars that consumer don't want. Automaker prefer to pay the penalty when they don't respect CAFE standard than to meet them.

Gas tax now, or keep borrowing to china to import more and more oil, the rest is BS.


Punitive action such as taxing does not work in the long-term - look at the miserable failure that is Europe - unhappy people utterly giving up on their individuality expressed through road trip culture.
As has always been the way in the past and will continue to be in the future - technological innovation bringing the life-style-related features that consumers want and will, without their knowing, save a substantial amount of emissions, reduce vehicles in landfill, and (re-)provide a vibrant economic industry, is the sole way. Is there going to be increased climate change, environmental degradation, and failing infrastructure in the short term along that path-of course. It is evil and the near-future is grim, but it is the only way to move society into the next stage. Many disparage the industrial revolution for bringing ills to society - but no society wants the undeveloped outcome of having taken the other route - despite environmentalist concerns and claims to the contrary.
People are generally idiots and the worst thing you can do is tell them so by taxing them to change their behavior. That way is retreat, conflict, and chaos - vastly unpopular and political suicide. The environmentalist dream of people behaving and caring about the long-term of either the environment or their industrial footprint or their contribution to a compact urban layout is shear nonsense - only attainable by deceiving the public with big, bright, shiny cars with cheap running costs (that don't emit, can be plugged in, and can be made part of a hub-type transport network) despite the sneers and razzing of angry (and gradually submitting) enviros.



You are absolutely wrong on the whoe thing from A to Z. What do you know about the happiness of people in europe compared to US ? nothing, I am from Europe and live in IS and can tell that you are plain wrong. The most heavilty taxed country are also the most advanced both economically an socialy :Sweeden, Islande, Norway, Denmark, Netherland, Germany, France, Belgium, Finlande. America is the model that is failing: decreasing education, need to import brains because the educational system is a complete failure, no social platform, hourly productivity is behind europe, almost no vacation time, no retirement or universal medical coverage, outrageoulsy expensive unniversities so that the access is closed for most of people, poor quality of industry in general (specialy cars), soaring societal disease like obesity, diabete, insecurity. Do you want to compare the percent of people in jail in europe and US ? faliure of the democracy (US is controlled by lobbies not by popular vote) last but not least shoking growing gap between rich and poor stagnating wages in the middle class when the 2% richest of the country are capitalizing almost one third of US wealth. Collapsing financial system (you want to beat on the value of the dollard moving forward) on the list goes on and you want to lecture the rest of the world ? do you research first you will realize are wrong you are.

Tax work and it is proven

Nat Pearre


If I may paraphrase (and if I understand your message correctly) you are saying that the only reasonable way to move forward is to do nothing and wait for technological solutions to things for which there is no market incentive.

Or are you arguing for command-and-control style regulation (like CAFE standards), saying that they will provide the most efficient outcome. -That carmakers will eventually be able to meet the standard while still building the big bloated cars Americans like to drive?

I would argue that by taxing gas (or preferably CO2 in general) we would be creating an environment where there was incentive for such innovations. As we saw last summer, we can very quickly change the spending habits of Americans with a strong price signal, with the added benefit that the revenues from a gas tax could displace other distortionary taxes, or could fund progressive social programs and services like those the Treehugger points out are such crap here (like public education).


We already tried a gas tax of more than $2.00 per gallon. It contributed to a global collapse of our economy.

Any smart economist will tell you that when prices increase, it has exactly the same effect as a tax increase with one important difference; it doesn't provide money for the government to spend.

One of the most certain ways to put the whole world into a years long, major depression is to add taxes.



when did america tried a $2.00 tax per gallon ?

I am amazed by the amount of lack of understanding of the way market work by some people who post here.

please forget 1 second your hate for the word "tax" and try to think a bit: america alone consume 25% of the oil produced in the world, right? Now if you put 2$ gas tax per gallon you will destroy the demand in US that will weight significantly on the ovewhole demand and prevent crude oil to increase like we saw last summer. What people don't understand in this country, is that a gas tax is the best insurance against future uncontrolled oil price increase (and the dictatorship of OPEC) when the production will have hard time to meet demand as we are heading for very soon.

2nd, if you were doing your research properly on what is done in europe, where the sale tax is about 20%, you will see that it doesn't means that the price of good are 20% higher than if there were no sale tax. The market forces play here, if you increase the sales of a given amount, the market price of the goods will only increase by at worse half of the percentage of the tax increase. It is not that difficult to understand.

Sales tax don't kill the economy since it is re-injected and redistributed in the economy. The failure of the american economical model is the failure to understand that the best economical system is the one that best redistribute the wealth, and the worse one is the one that concentrate the wealth as it is happening right now in US. That's what is killing america now : the ever worse redistribution of wealth, this is the recipe for the revolution and that's exactly what happened in Europe before and triggered all the revolution we have been through.


What I forgot in the long list of potential failure cause of the american is : military spending. When a country is spending more than all the rest of the world together in military just to maintain its influence beyong its border the collapse of the empire is not far. First as Mr Obama, fairly mentionned it, there is no example in history of a country that can maintain its military suprematy with a decelining economy. On the contrary there is counteless example of country who sunk because there were spending more in military than in education, healtcare, infrastructure etc...

All the ingredients are here for a painfull awake in america.
Wake up guys with a domestic debt that is 3 times your GDP in a slowing economy you have no margin to turn the table, no margin !


Treehugger –
Do you mean to imply that maintaining military supremacy will be the cause of economic decline? This is simple minded belief in what you wish was true. Like thinking people do NOT want to buy big cars.
Countries that sunk because there were spending more on military than on education, healthcare, infrastructure include North Korea and Cuba and ???
Umm, were they super powers?
I expect China might well surpass us in the foreseeable future.
But not because of their spending on education, healthcare and social programs, but because of their totalitarian rulers and their new brand of free market.
Guess what, we will be in BIG trouble when China follows their big economy with a big military. But, if we follow your philosophy, we will be slaves with clear consciences.

In regard to gas taxes.
We have a government to levy and collect taxes so as to provide for common defense and promote the pursuit of liberty and other essential actions.
Taxation should only be used in lieu of market forces to force absolutely essential behavior that would otherwise not occur. That’s not socialism, that’s survival. Taxing/spending for things minorities (particularly Pelosi and those who pay no taxes) want is the worst form of socialism.
But cheap gas begets big cars. This is too simple to argue.
Oil is now $40/bl and gas is $2/gal.
With today's low tax it is likely to soon be over $120/bl and $4/gal.
With higher gas tax, it might become $60/bl & $4/gal.
A big, big improvement and, I firmly believe, absolutely essential.
Both ways $4+ /gal reduces consumption but one way works sooner and reduces imports.
This is like income taxes; they are mandatory (for some of us).
Other taxes conceivably might replace income tax, but to think voluntary contributions to the Government could, is laughable.
Nor can I imagine any way a “market” could fund the government or get the jump on these recurring oil crises by reducing our consumption NOW.

Raising gas taxes takes political guts, and aren't we overdue for at least ONE thing that is NOT business as usual. I’m not holding my breath.


Toppa Tom

You want an example of a super power that collapsed because of its military spending ? easy : URSS. And yes absolutely overmilitary spending will cause economic decline, military spending and war are intinsically inflationary, you borrow money to build equipment that don't improve the life of poeple or in the worse case destroy assets when you use them.

Asides, this idea tha China will try to outpace US in the race for military spending is just plain ridiculous, there is no evidence or even sign of this, and they simply can't afford it.

Taxes have to be used "to force absolutely essential behavior that would otherwise not occur" just like building school, providing unemployment compensation, universal healthcare, education, infrastructure, defense, etc. I agree that's not socialism that's survival, no civilized society has ever worked without taxes from the Roman empire until today, so I don't understand this hate for taxes in this country.

And yes I agree a situation with 60$crude/4$gas is way better than 120$crude/4$gas because in yje first case you control the game in the second case you are a victim.


Well yes, the USSR collapsed because of military spending. But it was OUR military spending that accomplished this.
Their communist society could not support the military spending required to keep up.
The Iraq invasion was a very huge (and unnecessary, IMHO) drain of money (it was mostly emergency discretionary and supplemental spending though, not DOD base) from the budget with essentially no "product" or domestic purchases (at least in regard to the soldiers stationed overseas).
But most of the base military budget is for nation defense as described in the constitution and most of it is spent domestically. Afghanistan is a big exception, but I think it is also not funded from the base DOD budget.
“this idea tha China will try to outpace US in the race for military spending is just plain ridiculous”
How can apparently rational people believe GM management is capable of more malicious behavior than the Chinese rulers?
Assuming you’re serious, China’s claimed expenditures are now 10 to 20 % of ours, and they’ve only just begun.
Our economy and the new admin will probably reduce military budgets but I doubt they will let it go down very much. And Iraq and Afganastan will continue to soak up $$$



If china wanted to play in the military race they would have started much earlier. 2nd if they have some military it is certainly not to invade US or even Japan. A country that essentially get its wealth from exporting goods don't go to war, period, sorry maybe they plan to invade Taiwan, but they don't even need to and why should we care?

why should america spend so much money on their defense, what is the threat ? where are the invaders who want to penetrate US ? US is spending so much in military to do the police in the world but that is no longer affordable neither it is a good thing.


Actually the US spent so much for the military during the Cold War because it had to protect the Europeans from the USSR. Had the US been smart they would have waited out WWII and then cut a deal with Germany which would probably have won.


"If china wanted to play in the military race they would have started much earlier."
I doubt China accepts this weird restriction.
"2nd if they have some military it is certainly not to invade US or even Japan."
This point would be marginally better if it pointed out how far away the US is (even in a shrinking world).
It's like some little country, like Japan, attacking the US (not counting Pearl harbor).


Ja voll, Mannstein.
And 完全是.


Umm - back to the issue.
"What may look like an attractive technology to a society can look pretty crappy to a consumer.". - Steven Plotkin
Does this mean, "the market will decide".
And is brainwashing no longer ineffectve ? Or no longer allowed?

“Congress should not pick [vehicle technology] winners—policymakers have a hard time being neutral. Our history with alternative fuels has been truly awful.”
—Steven Plotkin.
Guess what Plotkin, This is so obvious.
But the new regeme will probably do it anyway - in spades.

"New car buyers are not like pioneers, advocates and experts, Kurani noted."
Are we pioneers, advocates and experts now; not geeks?


Back to PHEVs. There is no way that drivers of pickups and large SUVs are going to switch to Prius-like cars. Think 'death before dishonour'. There are also low wage workers with long commutes that usually buy cars a few years old. These people can no longer get easy credit. Therefore PHEVs have neither the high mileage range nor the low price. Maybe at a pinch they might get into something like the new Opel turbo-CNG van if it was cheap enough.

If this is right then GM is gonna go broke with the Volt thereby wasting billions of taxpayer's bailout money. It all seems like a slow motion crash.


The Volt was never more than a headline grabber and concession to the geeks and liberal politicians to build "cars people want" (but that won't make a profit).
If it outsold ALL hybrids that would be - like less than 6% of the US market?
That is worth – almost nothing. Trucks have never dropped below 18% of the market.

The politicians have to use our bailout money to reward the unions for their votes and the millions of $$$ they donated.

If I was a GM stockholder, I would be looking to "absorb" as much equity as I could and leave a note in the lobby saying
"Dear Nancy Pelosi,
Here, it's yours. You think you know how to run it - have fun."


The Nissan Tsuru, a 1990 nissan sentra still being manufactured in Mexico sells there for around $6000.. a simplified design and economical. This is an affordable car for poor people.

Very hard to justify the cost of a hybrid based on savings, and that is what most normal people base their decisions on. You want people to afford better cars?, stimulate the economy by cutting taxes.. it always works.

Andrey Levin

Too many urban legends and bull about US debt/spending/budget is sling around.
Must read to anyone interested in real numbers and real problems:


Wow. so many interesting topics in the same thread!

First, taxes are needed because the price signal is too short sighted. You can't wait for the price of oil to grow again to force people buying more efficient cars. A car is around for 10 years and replacement of the complete lot of vehicles would take a long time. We have to act on decreasing oil consumptions immediately, otherwise will find ourselves in a situation were the oil is scarce and the infrastructure and technological solutions are still not there. At that point, we will only be able to cut usage by not doing things, which would depress the economy even further.

Second, the american debt can grow pretty much indefinitely without the dollar collapsing, since the dollar is from Bretton woods the standard currency, and is also the dollar used to buy/sell oil (and since energy is the primary need of a nation, then dollars are necessary to every one).

Third, the military spendings are necessary for USA to keep control of the oil producing regions, which are vital to maintain power. No one wants to invade USA, not even URSS wanted to invade USA. It has always been (from the birth of humankind) a battle for the control of resources. This does not mean that China is not a potential trouble. They are already acting quite aggressively (although with no weapons) to control resources in Australia and Africa.


If you want to tax gas more your gona have to get rid of the income tax and bring in large consumption taxes. This is about the only way of packaging such a tax that people would welcome.



Good post, tax is a way to anticipate the big future problem with oil

but you think that because the dollard is the standard trade currency then debt can grow indefinitely? yes and no, passed a certain limit and when other countries fele that america can no longer honor their debt, they will use other trade currency like Euro, and even Huan even if they are no officially recognized as standard trade currency. We are not that far of that point.

No US don't need to keep control of the oil producing countries, if these countries becomes politicaly unsatable, then oil price will soar and custometr will reduce their dependance to oil and these countries will be screwed so they will take care of their political stability by themselve because they have no choice.

You are right a gas tax can be neutral, you increase tax on gaz and reduce it on income, you put taxe on emissions and reduce on incomes, then suddently the society becomes much more efficienet and pollutes less while the level of taxation hasn't changed overwhole. For non tax payers you developp public transportations, bicycle lanes,small efficient vehicles.

I agree with you that the Volt won't solve the problem any time soon if ever. But you can design cars that get 60 MPG or even better without electric hybrid tech, look at the Aptera, or altenative vehicle like the Venture Car or the Carver or the Nano or even the Honda CRX from the 80s. The Venture car is probably a pretty damn fun car to drive, and can HIT the 100MPG without really new technology. Technologies like pneumatic hybrid, stop and start without hybrid (Mazda), alternator regenerative braking (BMW) variable compression ratio (EMC-5), improved aero (Mercedes bioconcept, Aptera) and lightness (Aptera again) are not more expensive than current tech.


Its not so much about tax neutrality so much as its about giving people what they REALY want in exchange for taxing something they realy might be rather nervous about. Everyone other then tax people of course realy would like to say goodbye to income tax and property tax and all those other annoying taxes and simply go to tax as you buy consumption taxes.



If you're going to write German I suggest you get it straight to be taken seriously. How about Ja wohl.

Incidentally the US hasn't won a war since the end of WWII. Some historians even question whether the US actually won that one. They base their doubts on the fact that half of Europe was enslaved by Stalin when the fighting stopped including Poland. Didn't Britain and France declare war on Germany to maintain Poland's freedom in 1939? Some victory for the West.


Very high Gas prices are necessary, but not sufficient for major PHEV adoption.

We have had high gas prices in Europe for decades, but have no PHEVs available. We have lots of small cars and diesels, but no PHEVs and no HEVs (yet).

If you consider fuel economy to be important (for whatever reason), you will need higher prices to get the cars, especially if you want PHEVs which look like being very expensive.

From a technical point of view they seem like a solution, but they are too expensive for anyone but enthusiasts and wealthy people.

As Alessio says, you can anticipate future high gas prices by adding taxes now - at leats your own government gets the money.

It is likely that gas pries will rise in the future as the world economy recovers (and this could happen very fast), but it takes several generations of cars to get the fuel economy up, so you need steady pressure, both regulatory and fuel costs to keep this happening.

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