Have hybrid cars reached a tipping point? The best answer is yes and no; yes for hybrids and probably yes for plug-in hybrids, but no for battery electrics.
Hybrids today are about 3 percent of new car sales, which isn’t stellar, but it’s not insignificant, either. Sales are likely to be buoyed as hybrids win awards, such as the number one spot on ACEEE's "Greenest Vehicles of 2013" list, just snared by the affordable Toyota Prius C (which achieves 53 mpg on the highway, 46 in the city). That's it below.
Here’s a shocker: A Deloitte survey that came out just this week surveys 1,500 American Gen Yers (and another 250 in Western Europe, and 300 in China) and found that only 2 percent would prefer a battery electric for their next car. But nearly 60 percent would “prefer a hybrid over any other type of vehicle.” That’s huge, that’s definitely a tipping point.
According to Craig Giffi of Deloitte, younger consumers really want fuel efficiency (89 percent want their next car to have better mileage). “Gen Y consumers view hybrid technology as proven and reliable,” Giffi said. It doesn’t hurt that hybrid cars often have the latest shiny infotainment technology, because the survey shows that younger buyers want their vehicle to be an iPad on wheels.
It’s not just younger people. Ford’s Wes Sherwood tells me that it believes its hybrid sales to all age groups have reached a tipping point, though he agrees battery sales will take longer. Ford’s strategy makes a lot of sense, because it embeds hybrid technology as just another box to check in its popular models.
The C-MAX and Fusion are both available in hybrid and plug-in hybrid versions (the C-MAX doesn’t even have a conventional version), without huge price disadvantages. Ford’s latest-generation hybrid system is 30 percent cheaper than the earlier iteration, which is how the company can bring the hybrid in for $25,995, a nearly $5,000 cut compared to the now-discontinued Escape hybrid.
I enjoyed my time in the C-MAX Energi, which gives consumers a range of choices — drive it like a regular hybrid, or plug it in and grab some electric range.
Strategy& also looked at the hybrid tipping point question. “Conventional hybrids may be the best alternative vehicle available today,” the study said, “but they are at a crossroads. Will they make the leap into the mainstream or remain a high-profile niche application?”
As a caveat, Strategy& points to its own research indicating that, without government incentives, higher-priced hybrids typically fail to achieve a lower total cost of ownership compared to conventional cars. But with existing federal and state tax breaks and subsidies, hybrids save $1,720 over an expected 6.36-year lifespan. Plus, there’s the satisfaction people get from passing gas stations and boasting about their impressive fuel economy.
A new Visiongain survey predicts that the hybrid market will grow in the next 10 years. “Hybrid vehicles and their electric drivetrains will become more commonplace and consumers will become more familiar with the technology,” it said, predicting more than two million global sales in 2013.
The company thinks the hybrid market share could cap at 10 percent of new car sales; I think it could go higher than that.
The outlook is much tougher for battery electrics, which are just 0.1 percent of the market, according to a JD Power survey. That share can only grow, and some think 2013 could see a substantial improvement — even a doubling — in sales.
It’s useful to look at what’s happened with the Nissan Leaf (pictured above). Carlos Ghosn, Nissan’s CEO, was at the just-concluded Detroit Auto Show (I saw him walk by) as his team unveiled a 2013 Leaf that will have improved range and, most significantly, a $6,000 lower price in a new budget model. Consumers will now be able to buy a Leaf for less than $20,000, once incentives are applied.
Ghosn said he’d hoped that Leaf sales would jump 50 percent in 2012, but instead they were up only 22 percent, which he described as “a disappointment for us.” Factors, he said, are price, range, reliability and the need for a public charging network.
Some analysts think that battery EVs are poised for takeoff. Pike Research, for instance, forecasts that the overall market for the lithium-ion batteries favored in electric cars will grow from $1.6 billion in 2012 to almost $22 billion in 2020.
Maybe. There are still too many wild cards that affect hybrid sales, too. Will battery prices come down? Will gas prices go over $4 a gallon again? Will climate change achieve a more central role in American policy? Will President Obama win in ramping up green car subsidies? We’ll know soon enough.
Related hybrid stories on MNN:
- Hybrid cars must make noise, feds say
- Toyota Prius is best-selling car in Calif.
- 7 electric cars to watch
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