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The future demand for hybrid and battery-powered electric vehicles may be overhyped, a new report from automobile market research company J.D. Power & Associates said.
"Combined global sales of hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs) are expected to total 5.2 million units in 2020, or just 7.3 percent of the 70.9 million passenger vehicles forecasted to be sold worldwide by that year," the report said.
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After surveying thousands of people in the US, Europe and China, the report titled "Drive Green 2020: More Hope Than Reality" said it will be difficult to convince a large number of consumers to switch from conventionally powered passenger vehicles to hybrid electric vehicles and battery electric vehicles.
According to the report, moving more drivers to battery-powered or hybrid cars will require the following actions:
* A significant increase in the global price of petroleum-based fuels by 2020
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* 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.
The company projects sales of hybrids and battery electric vehicles to increase from the current level of 2.2 percent of sales to 7.3 percent of sales, or 5.2 million vehicles, by 2020.
"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.
"Among consumers in the U.S. who initially say they are interested in buying a hybrid vehicle, the number declines by some 50 percent when they learn of the extra $5,000 it would cost to buy the vehicle on average," JD Power said.
The passionate bunch of hybrid and electric car enthusiasts "are generally older, more highly educated (possessing a postgraduate degree), high-income individuals who have a deep interest in technology, or who like to be among the early adopters of any new technology product. As a result, it is not clear whether the HEVs and BEVs will appeal to the general population," the report said.
China is considered a "wild card" in adopting electric vehicles as the world's most populous country is rapidly scaling up its electric-vehicle industry although it relies heavily on importing oil, the report said.
"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," the report said .
However, governments across the world have set aside billions of dollars in the form of subsidies for early adopters of these alternative energy cars and to boost production of batteries for such vehicles despite persisiting doubts about how many people will actually buy them.
The Department of Energy said it is investing $2.85 billion in electric vehicles of which $2 billion will go to help US carmakers produce advanced vehicle batteries and drive train components. Around $400 million will be invested to buy, test, and deploy different types of electric vehicles in the marketplace, and $300 million in cost-share projects under the "Clean Cities" program.
