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J.D. Power sees hybrid and EV share below 10% of US market through 2016 despite rising fuel prices

Jdp
Percentages for overall consideration of alternative powertrains (definitely would / probably would). Data: J.D. Power. Click to enlarge.

Growth of alternative powertrain vehicles sales will be limited by consumer concerns about costs as well as functionality, according to the newly-released J.D. Power and Associates 2011 US Green Automotive Study. With a rapid increase in the number of alternative powertrain vehicle models projected for the next several years, automakers will be fighting over the relatively few consumers who are willing to pay to “drive green”, according to the report.

The inaugural study examines attitudes of US consumers toward four primary alternative powertrain technologies: hybrid electric vehicles; clean diesel engines; plug-in hybrid electric vehicles; and battery electric vehicles. The study gauges consumer consideration rates of these powertrain types for their next new vehicle purchase and explores specific perceived benefits and concerns that factor into the decision-making process. Percentages for overall consideration (definitely would / probably would) were:

  • Hybrid electric vehicles: 51%
  • Plug-in hybrid electric vehicles: 37%
  • Diesel engine vehicles: 31%
  • Battery electric vehicles: 26%

By the end of 2016, J.D. Power and Associates expects there will be 159 hybrid and electric vehicle models available for purchase in the US market— a significant increase from 31 hybrid and electric models in 2009. However, J.D. Power also sees hybrid and electric vehicle share of the US market to remain below 10% through 2016.

While consumers often cite saving money on fuel as the primary benefit of owning an alternative powertrain vehicle, the reality for many is that the initial cost of these vehicles is too high, even as fuel prices in the United States approach record levels. Reduced expenditure on fuel is the predominant benefit cited by considerers for each of the primary alternative powertrain technologies examined in the study.

Alternative powertrains face an array of challenges as they attempt to gain widespread acceptance in the market. It is the financial issues that most often resonate with consumers, whether it is the higher price of the vehicle itself, the cost to fuel or charge the vehicle, or the fear of higher maintenance costs. The bottom line is that most consumers want to be green, but not if there is a significant personal cost to them.

—Mike VanNieuwkuyk, executive director of global vehicle research at J.D. Power and Associates

Although the environmental benefits of these alternative powertrain vehicles are recognized, they are mentioned far less frequently than saving money on fuel. For example, 75% of consumers who indicate they would consider a hybrid electric vehicle cite lower fuel costs as a main benefit. In contrast, 50% cite “better for the environment” as a main benefit of these vehicles.

Consumers who are not considering an alternative powertrain vehicle also recognize the fuel-cost savings these vehicles can offer. However, they cite significant perceived or actual impediments to ownership in addition to purchase price, including driving range, increased maintenance costs and compromised vehicle performance. These consumers are far more likely to switch into a more fuel-efficient vehicle powered by a traditional internal combustion engine than an alternative powertrain vehicle.

According to VanNieuwkuyk, concern about the purchase price of alternative powertrain vehicles—particularly for hybrid electric vehicles—has become even more of an issue in 2011. At the end of 2010, tax credits from the Energy Policy Act of 2005 were phased out.

Hybrid electric vehicles have been available in the automotive market for more than 10 years, and consumer awareness and understanding of them has grown during that time. As concerns about the functionality and performance of hybrid vehicles have abated, vehicle price has become more prevalent as the primary purchase impediment. Without a tax credit to offset the price premium, consumers must absorb all of this additional cost. Furthermore, aggressive government subsidies are unlikely to be sustainable over the long term. Ultimately, the true cost of the technology needs to come down substantially.

— Mike VanNieuwkuyk

Although there are also significant price premiums for battery electric vehicles, functional concerns are more likely to limit consideration rates for this powertrain. Driving range and the availability of charging sites away from home are the two concerns cited most often by those not considering this powertrain. This “range anxiety” contributes to the lowest consideration levels of the primary alternative powertrain technologies.

For clean diesel engines, fuel prices and availability—factors largely out of the control of vehicle manufacturers—have long been impediments to acceptance of the technology. Furthermore, negative perceptions of older diesel-powered vehicles continue to affect perceptions of clean diesel vehicles, as concerns about emissions and exhaust odor are mentioned frequently.

Advocates of clean diesel engines tend to be some of the most vocal among consumers who tout the benefits of their chosen technology. However, this consumer group is relatively small. Clean diesel technology continues to struggle not only against concerns about cost and perceived fuel availability, but also against the lingering perception that diesel is ‘dirty.’

—Mike VanNieuwkuyk

Implications for Automakers. Overall, the study reveals interest in alternative powertrain vehicles among a majority of consumers, with perceptions of green vehicles being largely positive. However, converting this interest into actual sales will require concerted efforts to improve the technology and infrastructure and reduce the cost to consumers.

The 2011 US Green Automotive Study combines information and insight from J.D. Power’s primary consumer research, social media intelligence, forecasting and transactional sales data. The primary research includes a study of more than 4,000 consumers who indicate they will be in the market for a new vehicle within the next one to five years. The study was fielded in February 2011.

Comments

kelly

As family and friends got SUVs, I bought a V6 Sonata.

While 30 mpg highway aint bad, I already watch $20 only bump the gas gauge as the smiling average 50mpg Prius drivers go by..

Dave R

"Ultimately, the true cost of the technology needs to come down substantially."

Ultimately, the true cost of burning dirty fossil fuels needs to be accounted for - which would offset the price premium of low emissions vehicles.

ds

more fun car to drive than the prius plus the prius 4 to 5k more

so in 100000 miles with 4 dollar gas you arent saving any money driving a prius

100,000/55 =1818 * 4 =7272

100,000/33 =3030 * 4= 12121


now if you are just wanting to buy the least amount of gas then prius buy far, but if you are looking to save money.

kelly

ds, with all the wikileaks/peak oil - there's no limit to future gas hikes.

I still remember gas prices tripling with the Arab embargo.

ds

i always think it is funny that they always say it is do to turmoil in the middle east

last time i checked there has been fighting in the middle east for 4000 years\

SJC

I remember "they"(so called experts)said that hybrids would remain less than 3% of the cars sold from 2000-2010.
Somehow these experts never really substantiate their opinions, it is suppose to be some magic prescience that everyone is suppose to believe.

Eletruk

Not really surprising statistics coming from J.D.Power who historically is in the back pocket of the automotive industry. If car manufacturers want data to back up the lack of sales of EVs & hybrids, who better to get it from than J.D.?

wintermane2000

Dont need to go hybrid to lower fuel costs. We had our old cars die on us this year and got used 2010 model fusion and focus cars... neither are hybrids but our fuel needs dropped quite abit.

I know some people down the street woth an old suv... 120 a week to fill that beast. But then again even if they upgraded to anouther family car capable of doing what they demand of that bugger it would still eat 70 a week in gas. And its paid off... alot of people have cars that are now paid off.. you just cant beat no monthly car payment and so much lower insurance costs.

HarveyD

Trying to predict the future is something that very few have been good at. Too many unpredictable factors (such as China's continued growth and oil consumption, China's EV and battery production, world and local fuel price, alternative fuels production and price, batteries performance, batteries price, energy price, Americans economic well being, Unemployment, EU's growth and well being, shale gas production and price, coal production and price etc etc ) can affect production and sales of electrified vehicles in the next 10, 20 or 30 years.

One thing is highly probable, i.e. the arrival of many more electrified vehicles in China and Asia and eventually in EU and USA.

Another probability is that China will have the largest economy sometime between 2015 and 2020, will produce and buy the most vehicles (ICE and specially electrified units) before 2015 and for many years thereafter.

Gerald Shields

First, I got to get a job, then I worry about the other stuff.

SJC

"Prediction is easy, except when it has to do with the future"

wintermane2000

Actualy I have been fairly good at predicting what people would do car wise. People generaly only own a car for 3-5 years maybe 7.. and the ones that own a car longer tend to be more conservative about it.

The result is alot of the people you wish would get a hybrid now dont need to because they have anouther car buying phase 3-5 years down the road when the car choices HAVE to be better. For now pocketbook wins because we are all a bit nervous about our job status and our house and the state we are living in and and and and...

Alot of people are just hanging on to paid off cars. It is the best choice.

SJC

"There is no reason anyone would want a computer in their home." -- Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977

SJC

Prediction is very difficult, especially about the future.
Niels Bohr

Arne

The current is, what, 3%? Then 10% is still a tripling in 5 years time.

ds

automakers taking advantage of the sitiutation

trying to make a big profit on the early adopters and if they arent bought they will say there is no market.

if the volt were sold at the prius price then that would be something

the difference in sticker price 12000 buys alot of gas

i was going to trade my corolla in on a new 55mpg vw until i saw the 7k sticker bump

dahcredyns

SJC-

Didn't JD Power pretty much predict the hybrid sales rate almost perfectly?

I remember following Anthony Pratt's research at JD many years ago and his 'magical predictions' were typically based on supply chains and plans for new supply chains.

since it takes years just to build the manufacturing centers for new supply chains and years for automakers to work these new supplies into their manufacturing capabilities, I don't think JD Power is practicing some kind of mysterious voodoo. i think they're mostly forecasting based off the real world dollars being spent by automakers themselves.

again, Pratt's forecasts many years ago for 2010, for instance, were basically spot on. maybe it was luck, but i don't think a five year forecast is that hard for autos based on the manufacturing patterns of the auto industry.

SJC

As I recall, most experts under estimated hybrid sales. We will see if these projections come true. There may be a self fulfilling quality about these predictions, I would like to see some from the companies that actually produce the products.

SJC

If you notice they are now including plugs, EVs, diesels with hybrids and saying half will be hybrids. That puts hybrids under 5% the next five years. That is probably a pretty accurate projection, but what does that do for 11 million barrels per day of imported oil...not much at all.

Sirkulat

The plug-in hybrid drivetrain will last years longer. Converting a car to a plug-in hybrid is a shade tree operation. Planned Obsolescence is keeping hybrids from their rightful market share. It's just too expensive to stop us from destroying the ecosystem. There's no profit in it. The wealthy will expropriate remaining habitable retreats while the rest of us starve or be employed as plantation workers if we pledge allegiance to a gold god.

Engineer-Poet
it takes years just to build the manufacturing centers for new supply chains and years for automakers to work these new supplies into their manufacturing capabilities.... i think they're mostly forecasting based off the real world dollars being spent by automakers themselves.
In other words, the "predictions" of sales are from what top company management has already decided they'll make available for sale. This is just like what was happening as gas prices started to spike back in '06-'08: the Big 3 made what they'd planned to make, and used incentives as necessary to get them off the lot. What consumers wanted didn't matter (which is why my choices were limited to Japanese or European last time I went shopping; Detroit built cars like I wanted, but didn't sell them in the USA).

If we're going to have a command economy in vehicles, I think Washington is a better place for the command center than corporate boardrooms. We can vote out the bastards in Washington.

SJC

It is market driven if the product is available at an affordable price. When the car makers could sell many more but a limited amount are available or the models available are loaded and over priced, then the market makes choices to buy other products.

The corporation does not make decisions that are good for the country, but the company. This being the case, we wonder why the outcomes are not best for the country, it seems rather obvious. They put CAFE in place but do nothing with it for decades and we wonder why our mileage is not improving. Self delusion is wide spread.

HarveyD

When more and more profit becomes the only driver, we can expect to get many more real estates, banking, insurance like bubbles in the near future. A credit, food price or energy bubble may be on the horizon. Difficult to say which one will come first. Speculators are working on it.

SJC

The book Energy Victory outlines why conservation and mileage increases may be good for the individual and the country, but over time OPEC will adapt and the cash will continue to flow.

wintermane2000

Actualy neither side wanted to up the cafe numbers much in reality for quite a few years. They were both worried at a backlash so they talked but didnt actualy do much.
Oddly enough bush did increase cafe numbers.. on trucks.. .5 mpg or something... To this day i have no clue why he bothered to do that.

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