In a former life, I had worked a bit with J.D. Power. I knew them intimately. We had our issues. This is one of the few times I wholeheartedly agree with them. “Future global market demand for hybrid and battery electric vehicles may be over-hyped” is the conclusion of a new J.D.Power study, titled “Drive Green 2020: More Hope than Reality.”
For 2010, J.D.Power sees worldwide sales of hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs) to total 954,500 vehicles, or 2.2 percent of the 44.7 million vehicles projected to be sold through the end of 2010. That picture should surely change 10 years later, no?
No. By 2020, J.D.Power sees combined global sales of HEVs and BEVs at 5.2 million units, or just 7.3 percent of the 70.9 million passenger vehicles forecasted to be sold worldwide by that year. And what’s keeping them? It’s not range anxiety. It’s plain old money.
“While many consumers around the world say they are interested in HEVs and BEVs for the expected fuel savings and positive environmental impact they provide, their interest declines significantly when they learn of the price premium that comes with purchasing these vehicles.”
“Many consumers say they are concerned about the environment, but when they find out how much a green vehicle is going to cost, their altruistic inclination declines considerably,” said Humphrey. “For example, among consumers in the U.S. who initially say they are interested in buying a hybrid vehicle, the number declines by some 50 percent when they learn of the extra $5,000, on average, it would cost to acquire the vehicle.”
If hybrids and plugins are supposed to be a huge success, one, or preferably more of the following needs to happen.
- A significant increase in the global price of petroleum-based fuels by 2020
- A substantial breakthrough in green technologies that would reduce costs and improve consumer confidence
- A coordinated government policy to encourage consumers to purchase these vehicles.
But, says the report, “based on currently available information, none of these scenarios are believed to be likely during the next 10 years.”
“While considerable interest exists among governments, media and environmentalists in promoting HEVs and BEVs, consumers will ultimately decide whether these vehicles are commercially successful or not,” said John Humphrey, senior vice president of automotive operations at J.D. Power and Associates. “Based on our research of consumer attitudes toward these technologies—and barring significant changes to public policy, including tax incentives and higher fuel economy standards—we don’t anticipate a mass migration to green vehicles in the coming decade.”
If that’s what their research says, then the truth will be much bleaker. Consumers are known to lie through their teeth when it comes to green issues.
In developing countries, and that’s where the growth is and will be, money plays an even bigger role. Ironically, if they buy cars with as much abandon as expected, maybe the “significant increase in the global price of petroleum-based fuels” part will happen earlier.