Cost Remains Barrier To Hybrid And EV Growth

by Jeff Gilbert
WWJ AutoBeat Reporter

Interview: Mike Van Nieuwkuyk of J.D. Power and Associates talks about new "Green Vehicle Study."

TROY (WWJ) A new J.D. Power study shows Americans are more interested in hybrids and electric vehicles than ever before.  They just aren't ready to buy one.

"The sad part of this is while there is a lot of interest in green products, and green automotive powertrains, the price is still the barrier," says Mike Van Nieuwkuyk, J.D. Power's executive director of global vehicle research.

J.D. Power surveyed four thousand people who plan to purchase a new vehicle in the next five years, as part of their annual Green Automotive Study.  VanNieuwkuyk said 75 per cent of those they talked to were attracted to alternative vehicles because of their price, while 50 per cent liked being green.

"The bottom line is that most consumers want to be green, but not if there is a significant personal cost to them."

And that cost is often the deal breaker.

"What we're finding is that same motivation to save money is offset by the premiums they have to pay, which makes it difficult for them to make that investment."

Hybrids can cost several thousand dollars more than a conventionally powered vehicle.  Electrics have a price premium of ten thousand dollar or more, with other issues like limited range.

That's expected to limit hybrids and electric vehicles to less than ten per cent of the automotive market through at least 2015.

There are more hybrids and electric vehicles on the market, with more expected.  Thirty one vehicles fell into those categories last year.  J.D. Power expects 159 vehicles to have some form of electrification by 2016.

That could push the price down, which could increase interest, especially if there are more increases in gasoline prices.

Diesel powered vehicles, which are very popular in Europe, remain of limited interest, according to the study.

"Advocates of clean diesel engines tend to be some of the most vocal among consumers who tout the benefits of their chosen technology," said VanNieuwkuyk. "However, this consumer group is relatively small. 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.'"

VanNieuwkuyk says government incentives, which expire this year, will be needed to keep customers interested in alternative powered vehicles.

"They need that assistance, especially in an economy where we're being very frugal about where we're spending our money."

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