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Chevrolet Volt

Ford Focus Electric

Hyundai Sonata Hybrid

Honda CR-Z Hybrid
Despite rising sales, J.D. Powers is convinced "green" vehicles will only see slow pickup, be overcrowded

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 them."

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 USD/gallon.

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 USD.

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 USD premium.

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 hybrid.

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 [1][2][3].

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 non-electrified models.

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.



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RE: Can this be true...
By TheRealArdrid on 4/28/2011 12:00:24 PM , Rating: 0
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. 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. 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. Furthermore, if you think consumers buying hybrids or EVs is going to change a damn thing, you're even more naive than I thought. The government is the only one who can fix this problem because they're the only ones who can set the damn rules.


RE: Can this be true...
By MrTeal on 4/28/2011 12:08:25 PM , Rating: 2
quote:
There is no justifiable reason for his fuel bill to double in a month's time.


You know, other than perhaps he used more fuel in one month than he did in the other? Or he had a yearly negotiated rate that expired and the new rate is more?

I just got a $300 water/electricity bill, when I normally average $140 or so. They hadn't read the meters in a few months and my consumption was higher than their estimates, so when an actual meter read happened I got a nice surprise. That's not the utilities' fault though, that's just how life works.


RE: Can this be true...
By YashBudini on 4/28/2011 12:13:37 PM , Rating: 2
quote:
I just got my fuel bill for this month, & it usually is $110-150/month, this month it's $240,

Fuel pumps and cash registers don't work like meter readers.


RE: Can this be true...
By MrTeal on 4/28/2011 12:32:52 PM , Rating: 4
No, it's actually worse, since fuel is purchased in discrete transactions. Case in point, in the summer I bike the 10 mi round trip to work. I still use gas, probably in the range of a half tank a month. So, in my car I might average $25, but some months I might not fill at all. Some months I might put in $50 at the start of the month and another $50 at the end if I've been doing a lot of driving.

No where in North America has the price of gas doubled in the last couple months. So, if his gas bill doubled, he either
1) Drove more
2) Drove in a manner that he got worse fuel economy
3) Started the month with less fuel in the tanks than he ended it with
4) Some combination of the above

Gas has gone up, but not that much.


RE: Can this be true...
By YashBudini on 4/28/2011 12:46:12 PM , Rating: 1
Yeah fine his numbers don't add up, doesn't mean he's not going broke.


RE: Can this be true...
By Hiawa23 on 4/28/2011 12:56:59 PM , Rating: 2
You know, other than perhaps he used more fuel in one month than he did in the other? Or he had a yearly negotiated rate that expired and the new rate is more?

Here's the answer. He, I, didn't use more fuel. It used to cost me $25 to fill up my Lancer, now it costs me $38 to $40, & I have to fill it up 4 or 5 times a month & all I do is drive that to work & home, & use the Honda for my weekend & other driving which doesn't cost me anymore than $20/month. The difference in my bill is the difference it now costs to fill the car up, not driving more. I really did not think I had to state this but I guess I did for some.


RE: Can this be true...
By MrTeal on 4/28/2011 1:23:42 PM , Rating: 2
Assuming you put the same amount in each time, that would imply that the price of gas has gone up 60% since the days when you paid $25 a tank.
http://www.gasbuddy.com/gb_retail_price_chart.aspx...

Gas has gone up about 40% since it's low last summer, but that's not unexpected. It's still lower than it was in the summer of 2008 before the recession really tanked gas prices. Using either number, gas hasn't doubled in any recent time frame. It sucks you got a big bill, but it's not because gas doubled in price over the last couple months.


RE: Can this be true...
By Hiawa23 on 4/28/2011 1:45:09 PM , Rating: 2
Gas has gone up about 40% since it's low last summer, but that's not unexpected. It's still lower than it was in the summer of 2008 before the recession really tanked gas prices. Using either number, gas hasn't doubled in any recent time frame. It sucks you got a big bill, but it's not because gas doubled in price over the last couple months.

I never said gas doubled. My difference from this month compared to the last is the difference it now costs as I have stated. I will leave it at that. Hybrids, & EV's are not the answer for most folks so my question was simple, not about my situation, I just used that as an example that I am sure many can relate to. What can anyone do to get gasoline prices down? If you have no answer other than bashing complete strangers on their driving habits or making assumptions, which seems to be the norm on these boards, then there is no point. Life will go on, It's just getting tougher for many to attain this so called american Dream which really doesn't seem to possible for most folks, especially the middle or lower class & it because of stuff like these insane prices whether it be at the pump, or store or energy, or God forbid sickness.


RE: Can this be true...
By Spuke on 4/28/2011 2:55:09 PM , Rating: 2
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.
I live in California and my gas didn't come close to doubling, even on my diesel pickup in which the fuel cost rise has been quite a bit steeper.


RE: Can this be true...
By Calin on 4/29/2011 8:12:55 AM , Rating: 2
quote:
What can anyone do to get gasoline prices down?


Increase production or decrease consumption. Decreasing production costs might help (if this leads to production increasing above consumption).
I think the world production is no longer increasing, and the demand is slowly rising due to countries like India and China slowly increasing their consumption (what do you think the effect of the small and cheap Indian cars will be?).


RE: Can this be true...
By Hiawa23 on 4/28/2011 1:16:10 PM , Rating: 2
Some reponses are hilarious. I only get gas at one station, BP. I use my BP card for all my fuel purchases, of which I pay every month, & I usually have to fill the Lancer up once a week. I did not drive any different, my cars are in tip top shape especially the Lancer. I work for Goodyear, so the cars are fine. My fuel pumps did not go bad in a month, the cars still get the same gas mileage, it's the difference that it now costs to fill the cars up now is what caused my bill to go up, & this along with everything else that has gone up, like the kid's lunch, tuition, my student loan, mortgage, insurance, just the cost to live yet incomes have not risen is the problem, not my cars. The problem is we have been gouged & no one seems to have any fixes that will work for the masses.

Judging by many of the responses, wow, some just missed the point, completely. Most folks aren't buying new cars or can afford to buy Hybrids, so gasoline is the only solution for most. I was only wondering what anyone could do to get gasoline prices down. It's really that simple.


RE: Can this be true...
By someguy123 on 4/30/2011 5:56:38 PM , Rating: 2
You can argue all you want but the fact of the matter is gas prices have not increased to the point where you'd be seeing 60% increase in cost. Are you expecting people to believe your specific pump has a unique rate that nobody else shares (even areas of peak pricing)?

At any rate, you were initially asking for "relief" from gas pricing and pushing your sap story while trashing the government for not providing some miraculous reduction in gas prices. They don't own Exxon, and you're not entitled to lower gas prices. Hell, you're not entitled to the lifestyle you have right now. There are plenty of people substantially worse off than you. How about they get help first before you continue going off about how gas costs too much?


RE: Can this be true...
By Iaiken on 4/28/2011 12:19:10 PM , Rating: 2
quote:
The government is the only one who can fix this problem because they're the only ones who can set the damn rules.


False, the government doesn't have the power to fix this because the oil companies and the banks have the power to sway government opinion away from the interest of the masses and towards their own best interests. To think that some noble and princely soul will come forth to save the people from these abuses is naive at best.


RE: Can this be true...
By Hiawa23 on 4/28/2011 1:03:26 PM , Rating: 1
In my view the govt could have fixed this years ago by adopting some sort of energy plan, but what do I know, my degree in not in government.


RE: Can this be true...
By Spuke on 4/28/2011 2:57:20 PM , Rating: 2
What would this energy plan consist of?


RE: Can this be true...
By YashBudini on 4/28/2011 5:43:02 PM , Rating: 2
Trapping the vast quantity of rising hot air about D.C.


RE: Can this be true...
By Spuke on 4/28/2011 7:26:54 PM , Rating: 2
quote:
Trapping the vast quantity of rising hot air about D.C.
Where do I sign? LOL!


RE: Can this be true...
By Hiawa23 on 4/28/2011 6:50:55 PM , Rating: 2
What would this plan be made up of, well, that's what I thought taxpayer dollars were paying for all these years. It would be made up of something better than what we have now.


RE: Can this be true...
By Spuke on 4/28/2011 7:28:40 PM , Rating: 2
quote:
What would this plan be made up of, well, that's what I thought taxpayer dollars were paying for all these years.
Can't argue with this! But I think we're asking for something that will either take a long time to happen or will never happen. I see problem number one being the two party system.


RE: Can this be true...
By Reclaimer77 on 4/28/2011 12:34:39 PM , Rating: 1
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


Exxon doesn't set the price on what a barrel of crude is, or how much it costs to refine it though. Why do people ALWAYS make this mistake?


RE: Can this be true...
By YashBudini on 4/28/11, Rating: 0
RE: Can this be true...
By Reclaimer77 on 4/28/11, Rating: 0
RE: Can this be true...
By Spuke on 4/28/2011 2:58:14 PM , Rating: 2
quote:
He never said Exxon set the price, why do you always make that mistake?
The guy did mention Exxon and their profits. Sounds relevant to me.


RE: Can this be true...
By YashBudini on 4/28/11, Rating: 0
RE: Can this be true...
By Reclaimer77 on 4/28/2011 12:48:55 PM , Rating: 3
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.


The oil refineries in the U.S and Canada have been running flat out at maximum capacity for a while now. Supply and demand is absolutely playing a role in gas prices, as well as the uncertainty in many oil producing Middle East nations. We're barely keeping up with current demand, there's just no overhead in the system to keep up with increased demand. Therefor higher prices.

This is just how it works, no greed conspiracy, sorry. If demand goes up, and the supply does not, then you have rising prices. It's just that simple.


RE: Can this be true...
By Dr of crap on 4/28/2011 3:23:55 PM , Rating: 1
There is no supply problem. Hasn't been for many years. OPEC is running out more barrels than they did in 2009.

Make sure you know the answer before just writing anything.


RE: Can this be true...
By Reclaimer77 on 4/28/2011 8:13:19 PM , Rating: 2
quote:
There is no supply problem. Hasn't been for many years. OPEC is running out more barrels than they did in 2009.


It doesn't matter how many barrels of OIL they can crank out, if we barely have enough REFINING capacity to keep up with fuel demands. Hello? I thought this was obvious. Oil has to be turned into fuel you know.

quote:
Make sure you know the answer before just writing anything.


Right, ok. I'll get on that...


RE: Can this be true...
By Schrag4 on 4/28/2011 12:54:01 PM , Rating: 3
quote:
Exxon just reported another ridiculously profitable quarter to the tune of $11 BILLION


And what was Exxon's profit margin during that quarter? What would you like to set their profit (and margin) at exactly?

quote:
The government is the only one who can fix this problem because they're the only ones who can set the damn rules.


If your aim is lower prices for energy, there are plenty in our government that would love for prices to increase unnecessarily (Obama included), forcing us to use less. I don't think you want them "fixing" anything.


RE: Can this be true...
By acer905 on 4/28/2011 1:00:38 PM , Rating: 3
http://www.jb-williams.com/4-25-06.htm

Oil companies profit comes from less than $0.10 a gallon. The record profits come from record amounts of gas sold.

The federal government gets profit of the tune of nearly $0.60 a gallon. And they want to tax it even more?

http://www.dailymarkets.com/economy/2011/04/27/gas...

You are right though, the only entity that can fix the problem with gas prices is the Government, because they are the only ones who are price-gouging the consumers.


RE: Can this be true...
By callmeroy on 4/28/2011 1:47:21 PM , Rating: 3
Well if you read the CNN Money article on Exxon's 11B Q that'll tell you that Exxon swears only 6% of its profits come from selling gas at the pump. The article states that Exxon makes 7 cents per gallon at the pump and as contrast state and federal taxes (combined) range between 40-60 cents per gallon. So Exxon therefore claims our states and federal government are making many times more profit per gallon sold than they are.

(btw the main source , Exxon says, for its huge profits are its over seas operations and refining for commercial grade (re: not automobile) products)....


RE: Can this be true...
By Solandri on 4/28/2011 1:49:31 PM , Rating: 5
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.

Your mistake is in thinking that $11 billion in profit is something to be outraged about. ExxonMobil had $31 billion in profit last year, on $383 billion in revenue. That's a profit margin of 8.1%.

Here's a list of net profit margin by industry (next to last column).
http://biz.yahoo.com/p/s_qpmd.html
You can see that Exxon's 8.1% is about average for utilities, and is middle of the pack for all industries (you can click on each category to see what types of goods/services they contain). The technology, raw materials, financial, and health care sectors all had bigger average profit margins.

The only reason ExxonMobil has a large raw dollar profit is because they are one of the biggest companies on earth. Nothing more. Normalized for their size, their finances are pretty average. Chevron did better than them last quarter. Your ire is better directed at the health care, financial services, raw materials, and technology industries.


RE: Can this be true...
By Pneumothorax on 4/28/2011 2:12:23 PM , Rating: 2
Thank God, finally some voices of reason on this board. Further compounding the problem is our lame ass politicos including the President who do not do anything to better educate the public in this regard. Instead they just further whip up the paranoia. The way politicians talk, they want everyone else to work for free or donate 100% of their incomes to Washington.


RE: Can this be true...
By Lerianis on 4/29/2011 4:29:06 PM , Rating: 2
Agreed totally, TheRealArdrid. If the 'free market' was working as intended, with the economic conditions and the decrease in gasoline usage being taken into account, we should have seen gas price DECREASES, not increases!

I will be blunt: the free market FAILS for necessities. For non-necessities such as TV's, radios, computers (to a degree), etc.? The free market works.

With necessities however, it is WAY too easy for companies/speculators to cut down on production or whine about 'shortages' that really don't exist and manipulate prices.


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