Report: Hybrid and EV sales to grow but remain small

J.D. Powers and Associates says electric cars may be "overhyped" based on all the attention, projecting that by 2020 hybrid and battery electric vehicles will make up 7 percent of sales.

J.D. Power and Associates today forecast that 7 percent of new auto sales in 2020 will be hybrids or battery electric vehicles but a "mass migration" to electric cars is unlikely to happen in the U.S.

The auto review and research company said that despite interest by the media, environmentalists, and governments, electric-vehicle sales will take a back seat to gas-only cars for a variety of reasons in the next 10 years.

Specifically, the company does not project a sharp spike in oil prices between now and 2020, a technology breakthrough in electric vehicles, or coordinated government policies that will encourage consumers to buy electric cars. Also, consumers overall don't understand electric-vehicle technology and many will be unwilling to change.

"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," John Humphrey, senior vice president of automotive operations, said in a statement.

The company projects sales of hybrids and battery electric vehicles to grow from 2.2 percent of sales today to 7.3 percent of sales, or 5.2 million vehicles, by 2020.

The forecast, based on J.D. Power's annual consumer surveys on autos, echoes statements from auto executives and other market projections on hybrid and battery electric cars which find consumer interest in greener cars but significant barriers .

Although automakers expect to see more forms of electrification in the coming years, estimates as to how fast that will happen vary significantly. For example, Nissan, which is releasing the battery electric Leaf later this year, forecasts that battery electrics can make up as much as much as 10 percent of its sales in 10 years. Research and management consulting company PRTM, meanwhile, projects hybrids could represent 20 percent of auto sales by 2020.

Even though many consumers say they are concerned about the environment, the biggest barrier to adoption remains the higher upfront cost of hybrid and battery electric cars, Humphrey said.

The "wild card" in electric-vehicle adoption is China, according to the report. China, which relies heavily on imported oil, is rapidly scaling up its electric-vehicle industry.

"China is perhaps the only country that has the market scale, political will, and regulatory controls to quickly mandate a mass transition to alternative energy vehicles," according to the report.

 

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