The growth of alternative powertrain vehicles sales will remain limited while consumers remain concerned about the cost of such vehicles compared to conventionally fuelled models, a new study from JD Power and Associates concludes.
The new 2011 US Green Automotive Study found that while consumers in the US are concerned by rising fuel costs and by environmental issues, these concerns remain outweighed by the higher purchase cost of alternative fuel vehicles and concerns for practical implications of such vehicles.
A focus on driving consumer demand then will be more important to the success of electric and hybrid vehicles, the study concludes, as it is consumers- and not a lack of market availability -which is holding up the market for alternative fuel vehicles.
“Alternative powertrains face an array of challenges as they attempt to gain widespread acceptance in the market,” said Mike VanNieuwkuyk, executive director of global vehicle research at J.D. Power and Associates. “It is the financial issues that most often resonate with consumers, whether it is the higher price of the vehicle itself, the cost to fuel or charge the vehicle, or the fear of higher maintenance costs. The bottom line is that most consumers want to be green, but not if there is a significant personal cost to them.”
According to VanNieuwkuyk, concern about the purchase price of alternative powertrain vehicles—particularly for hybrid electric vehicles—has become even more of an issue in 2011. At the end of 2010, tax credits from the Energy Policy Act of 2005 were phased out.
“Hybrid electric vehicles have been available in the automotive market for more than 10 years, and consumer awareness and understanding of them has grown during that time,” said VanNieuwkuyk. “As concerns about the functionality and performance of hybrid vehicles have abated, vehicle price has become more prevalent as the primary purchase impediment. Without a tax credit to offset the price premium, consumers must absorb all of this additional cost. Furthermore, aggressive government subsidies are unlikely to be sustainable over the long term. Ultimately, the true cost of the technology needs to come down substantially.”
The inaugural study examined attitudes of US consumers toward four primary alternative powertrain technologies: hybrid electric vehicles; clean diesel engines; plug-in hybrid electric vehicles; and battery electric vehicles.
In the study of more than 4,000 people 51 per cent said they would consider buying a hybrid model; 37 per cent would consider a plug-in hybrid; 31 per cent would consider a low CO2 diesel car; and 26 per cent would consider a battery-only vehicle.
By the end of 2016, J.D. Power and Associates expects there to be 159 hybrid and electric vehicle models available for purchase in the U.S. market. This is a significant increase from only 31 hybrid and electric models in 2009. Despite this, car makers will have considerable work to do in educating consumers as to the true costs and benefits of these technologies.
