Some analysts think the electric
vehicle market is ready for primetime. Others have been less
convinced. Last October, investment firm J.D. Power and Associates, Inc.
estimated that by 2020 electric vehicles (EVs) would only gain a slim 7.3 percent market share.
I. Hybrid/EV Outlook -- Not Good?
Now the firm has returned with another report, bumping its estimates slightly,
but remains skeptical of hybrids, electric vehicles, and clean diesel.
Mike VanNieuwkuyk, executive director of global vehicle research at J.D. Power
and Associates states in a Detroit News interview,
"Alternative powertrains face an array of challenges as they attempt to
gain widespread acceptance in the market. The bottom line is that most
consumers want to be green, but not if there is a significant personal cost to
His report estimates that by 2016, market share of hybrids and electric
vehicles will remain under 10 percent. The report's basic argument boils
down to that EVs and hybrids are too expensive for customers. It cites a
recent 4,000 person U.S. survey that it conducted, which showed that a growing
number of customers were concerned about the prices of electric vehicles.
The J.D. Power report also cited concerns about function as a factor slowing
sales -- particularly for electric vehicles.
II. Too Expensive?
Other market research firms don't necessarily agree that the price of
electrified vehicles will trump the price at the pump. Rival research
firm Deloitte LLP conducted a 1,000 person U.S. study, which found that 78
percent of people would consider purchasing an electric vehicle if gas hit $5
Subcompact cars typically start at around $11,000 USD for the cheapest
non-hybrid models and around $19K USD for the cheapest hybrid models (the subcompact Honda
Insight and CRZ hybrids). Thus you're looking at a premium of around $8,000
For the mid-sized sedan market pricing starts at around $20K USD, with the
cheapest hybrid being the new Hyundai Sonata at $26,545.
In this segment you're looking at around a $6,500
A recent report by the U.S.
Department of Energy stated that the annual cost of gas for the
average family is $3,625 USD (based on a gas price of $3.61 USD/gallon).
Assuming an average household has two cars and that the hybrid sedan would get
at least 33 percent better gas mileage, a family would save approximately $600
USD annually by switching to a hybrid. In other words, it would take
approximately 7 years of ownership to break even with a compact or mid-sized
III. Small Vehicle Sales Up
According to industry statistics in the first three months of 2011 large car
sales have plunged 35 percent, while small car sales have jumped 25 percent.
Hybrid sales during the period accounted for 4.7 percent of sales, up
from the average 2.6 percent in 2010.
Those numbers seem more impressive when you consider that a tax credit for
hybrid vehicles expired at the end of 2010.
It seems clear that the high price of gas this spring -- with fuel regularly
hitting $4 USD/gallon -- has motivated some customers to get hybrid vehicles.
EVs from General Motors Comp. (GM)
and Nissan Motor Comp. (7201)
are still selling slowly due to limited distribution
and volume. Both companies hope to sell a modest 10,000 units by the
year's end. Mitsubishi Corp. (8058)
just released a new EV -- but only in Hawaii to
start. Ford Motor Comp. (F),
Toyota Motor Corp. (7203),
and Tesla Motors Inc. (TSLA)
all will release new EVs by the end of the year as well .
Two factors working in the favor of electrified sales is an increasing
selection and government pressure on fuel efficiency.
One of the few somewhat seemingly positive aspects of the J.D. Power report was
an estimate that by the end of 2016, 159 hybrid and electric vehicle options
would be available for purchase -- up substantially from the 31 available in
2009. (Of course the report casts this in a negative light as well, complaining
that the market will be overcrowded.)
And the Obama administration is working with the U.S. Environmental Protection
Agency (EPA) to deliver new fuel efficiency mandates for the 2017-2025 period.
It is thought that those mandates would demand fleetwide average fuel efficiency reach 62.5 mpg by
2025. That could force automakers to try to limit the sales of
IV. Clean Diesel, Where Art Thou?
A dirty little secret of the EV industry is that clean diesel vehicles can
currently get as good or better mileage as most hybrids.
In the first three months of the year, 24 percent of Volkswagen AG's (VOW) sales were clean diesel vehicles. Mazda Motor Corp. (7261)
and other companies are planning to offer new diesel models over the
next couple years.
Still J.D. Power is also pessimistic on clean diesel's prospects.
Mr. VanNieuwkuyk states, "Advocates of clean diesel engines
tend to be some of the most vocal among consumers who tout the benefits of
their chosen technology. 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.'"
Both with hybrid vehicles and with diesel, there seems to be a clear momentum
in the U.S. Yet J.D. Power seems convinced both movements will only see slow
growth at best. It remains unclear whether the pessimism is unfounded --
or whether it knows something other analysts don't.
quote: President Obama, is there anything you can do like tap our reserves, cause many of us need help right now, & Hybrid sales donot give us any relief. I just got my fuel bill for this month, & it usually is $110-150/month, this month it's $240, & the only reason I did not have shortfall in my monthly expenses was because there were 5 pay weeks this month instead of 4, which is like getting an extra pay check for those who gets paid every week.
quote: We need help now, does anyone have any answers, cause for most of us, fuel is the only price we care about. It's sad I keep hearing on how great we are, but it baffles me we have had decades to get off or atleast reduce our dependance on foreign oil so anytime one of these Arab countries cough, the speculators swoop in, & our prices skyrocket. Can anyone stop this or are we just screwed?
quote: There is no justifiable reason for his fuel bill to double in a month's time.
quote: I just got my fuel bill for this month, & it usually is $110-150/month, this month it's $240,
quote: I never said gas doubled. My difference from this month compared to the last is the difference it now costs as I have stated.
quote: What can anyone do to get gasoline prices down?
quote: The government is the only one who can fix this problem because they're the only ones who can set the damn rules.
quote: Trapping the vast quantity of rising hot air about D.C.
quote: What would this plan be made up of, well, that's what I thought taxpayer dollars were paying for all these years.
quote: Shut up, Mick, for God's sake. There is no justifiable reason for his fuel bill to double in a month's time. Exxon just reported another ridiculously profitable quarter to the tune of $11 BILLION
quote: He never said Exxon set the price, why do you always make that mistake?
quote: He never said Exxon set the price, why do you always make that mistake?
quote: If you think for a second that current gas prices are legitimately related to supply/demand, world crisis, or whatever inane reason corporations like to give, you're a complete idiot and a tool.
quote: There is no supply problem. Hasn't been for many years. OPEC is running out more barrels than they did in 2009.
quote: Make sure you know the answer before just writing anything.
quote: Exxon just reported another ridiculously profitable quarter to the tune of $11 BILLION
quote: Exxon just reported another ridiculously profitable quarter to the tune of $11 BILLION. Is that supposed to convince me that the "free market" is doing its job and NOT screwing over the average consumer? The free market doesn't work when it's cornered and manipulated by those who directly seek to profit from the lack of regulation.
quote: The U.S. is a free market system and if consumers are happy to stand by and get "screwed" at the pump (in your words), the oil companies will be more than happy to oblige.
quote: reduce our dependance on foreign oil
quote: Er... I don't think it is (or at least I don't think it SHOULD BE) the federal government's role to pay for your "gas price relief". You do realize that ultimately you're just paying for that out of your taxes?
quote: Then HELP YOURSELF. You are indeed "screwed" if you just sit around with your old vehicles hoping big brother government to bail you out. If you don't like that consider options like diesel, hybrids, or budget EVs next time you purchase a vehicle. Carefully assess the price vs. gas savings and make an educated decision as a responsible consumer.
quote: There's a reason to support these technologies
quote: But it's their roll to kill exploration, drilling, and refining domestically so we're burdened with overtaxed over imported resources at the mercy of OPEC?
quote: If we were drilling our own crude and refining it, the price per barrel would be a joke, like it used to be.
quote: allow the energy industry to serve the needs of the people
quote: Another false statement. The energy industry serves it's own needs and nobody else's.
quote: If the US fell back exclusively on it's own reserves, they would be completely consumed in ~1000 days based on current rates of consumption.
quote: Another false statement.
quote: "Drill baby! Drill!" basically translates to "The sooner the we use up all our oil, the better off we will be." Please tell me you see how ludicrous this sentiment is?
quote: better invade them for making a piggish lifestyle hard to upkeep.
quote: Come back when you don't have to lie to make an argument. As recently as 2008 two TRILLION barrels of shale were discovered in Dakota. The potential oil reserves in this continent would last FAR longer than 2 or 3 years. Where did you get that absurd estimate?
quote: The USGS estimate of 3.0 to 4.3 billion barrels of technically recoverable oil has a mean value of 3.65 billion barrels. Scientists conducted detailed studies in stratigraphy and structural geology and the modeling of petroleum geochemistry. They also combined their findings with historical exploration and production analyses to determine the undiscovered, technically recoverable oil estimates.
quote: extraction requires the equivalent of about three barrels of water per barrel of oil
quote: I know to you the acceptable amount of oil we would use would be ZERO, but some of us live in the real world.
quote: Even above recoverable oil faces technical challenges according to the Rand Corporation
quote: Wow, this couldn't possibly be too expensive to be of assistance now could it?
quote: The example was in extreme to demonstrate to you just how small an impact such an endeavor would have considering that many reserves are not worth tapping until the prices rise significantly.
quote: I design automated demand/purchasing systems for oil/gas/electricity retailers.
quote: From my point of view I think it's absolutely silly that we aren't better exploiting our ability to produce massive amounts of cheap electricity.
quote: Aren't you getting "bailed out" if you take a 12k government handout for an EV vehicle? How is that any better?This isn't about hoping big brother "bails us out". Big brother is CHOKING us. Our energy policy is ridiculous and you know it. Gas should be cheap, dirt cheap. If we were drilling our own crude and refining it, the price per barrel would be a joke, like it used to be.But Liberals like you don't want to see that. Because then nobody would want EV's or Hybrids. Your post is absurd Jason, I can't believe even you would be so intellectually dishonest.
quote: There's also a reason to wait until they are ready or viable. If you have to pay someone 11,000 dollars to purchase one, something isn't right there.
quote: I'd prefer you avoid that and ASK me what my opinion is in the future, please.
quote: If you don't like that consider options like diesel, hybrids, or budget EVs next time you purchase a vehicle. Carefully assess the price vs. gas savings and make an educated decision as a responsible consumer.
quote: He should be asking for 4 10 hour shifts or to work 1 day a week from home, or the most likely outcome when ends don't meet is to take a second job, a bicycle, or a Virago 250, a bus schedule. Your alternative is the least viable.
quote: More half baked truths. As if anyone can avoid being financially screwed, yeah we can stand up to K St.
quote: We could have, if we ditched a two party system whose politicians are mostly funded/bribed/paid off by a wealthy minority during their campaigns and who fixate, while in office, on ways to funnel more money to their sponsors, while occasionally adopting a moralistic stand to pander to their voter base.
quote: In this economy, most are asking where are the jobs. What jobs?
quote: I am all for free market & this fake fasad that things trickle down, but from where I am standing, & many middle or lower class, seems like it's just a license to screw over the lower classes, or middle class. The smallest % seems to be getting richer yet most others seems to be sliding the other way, but like you say, what a wonderful free market system we have.
quote: Ever notice how almost no Dems or Republicans are supporting a flat tax? There's a reason why -- the interests of those corporation and the wealthy few that control them.
quote: The U.S has the highest corporate tax rate in the world
quote: So I don't know Jason, I don't feel I'm being screwed at all as a middle class citizen. At least not by them....
quote: Because going to flat tax would require about 40% of the U.S government to be restructured? Would kill about 300,000 federal jobs
quote: Who's going to get behind such a controversial decision from WITHIN the Government? Do you really think they would give up that much power? Claiming "corporate control and greed" isn't exactly being genuine imo.
quote: Now mind you, I'm not criticizing ALL corporations . I'm just saying there's a certain number that game the system, and it's those I'm referring to in this discussion.
quote: Any corporation that isn't doing this, is doing a disservice to their investors. If you look at the biggest 50 companies in north america, practically of them do this (alphabetically):
quote: You seem at least mildly intelligent. Can you honestly not see that?
quote: That's just a shell game. Some of the largest and most profitable corporations like GE shelter their profits off shore
quote: Well I would say you're underinformed.
quote: In your effort to justify of why the flat tax is impossible, you've unwittingly provided a terrific argument in its favor. Nice going!
quote: But at the end of the day the special interests are making many a buck off your back. And your "yes guy" attitude is supporting that.