Growth of alternative powertrain vehicles sales will be limited by consumer concerns about costs as well as functionality, according to the J.D. Power and Associates 2011 U.S. Green Automotive Study.
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, Mike added.
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.
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, the report said.
The study examined U.S. consumers toward four primary alternative powertrain technologies: hybrid electric vehicles; clean diesel engines; plug-in hybrid electric vehicles; and battery electric vehicles.
The study reveals interest in alternative powertrain vehicles among a majority of consumers, with perceptions of green vehicles being largely positive. However, converting this interest into actual sales will require concerted efforts to improve the technology and infrastructure and reduce the cost to consumers.