The future global demand for hybrid and battery electric vehicles may be over-hyped, according to a new report released by J.D. Power and Associates.
J.D. Power said it expects the percentage of green vehicle (hybrid, electric, etc.) market penetration to remain in single digits through 2020, in part, because consumers don’t want to pay the price premium.
Prices will not come down until the sales volumes increase or until government incentives off-set the price premium, the report states. Furthermore, consumers still are concerned about battery technology and resale value.
J.D. Power projects combined global sales of hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs) to total 5.2 million units in 2020, or just 7.3% of the 70.9 million passenger vehicles expected to be sold that year. For comparison, global HEV and BEV sales in 2010 are forecasted to total 954,500 vehicles, or 2.2% of the 44.7 million vehicles projected to be sold through the end of this year.
According to the report, it will be difficult to convince large numbers of consumers to switch from conventionally powered passenger vehicles to HEVs and BEVs. A consumer migration to alternative powertrain technologies will most likely require either one of the following scenarios, or some combination of these scenarios:
- 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.
Based on currently available information, none of these scenarios are believed to be likely during the next 10 years, J.D. Powers said.
“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.”
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