Worldwide sales of hybrids through August were off 9% over sales during the same period in 2013. The drop contrasts starkly with the last 3 years, which have seen January-August sales rise 65% from 2011 to 2012 and 24% from 2012 to 2013. While the market for hybrids is certainly not going away – 2014 sales will likely hit 400,000 by year-end – it is becoming significantly more competitive, and expansion outside of the midsize hatchback segments that hybrids crowd is just not happening.
Toyota’s introduction of the Prius family in 2012, alongside a market for plug-ins that was limited to few costly models, signaled a revival of the hybrid market. Since then, though, plug-in makers have cut costs sharply, and the number of available models has grown considerably. Only 1/20th the size of hybrid market in 2011, sales of plug-ins are now one-quarter of hybrid sales. Meanwhile, the difference between hybrids and conventional gas- and diesel-powered vehicles in terms of fuel economy is shrinking.
Driven by Corporate Average Fuel Economy (CAFE) standards, automakers are introducing vehicles with stop-start systems that are already widely popular in Europe and have significant weight reductions through materials engineering and engine downsizing. Tracked by the University of Michigan Transportation Research Institute (UMTRI), the average new vehicle sold in the United States hit 25.8 mpg last month ‑ 5 mpg higher than the 2008 average.
All of this means that, for new hybrids to succeed, they must show significant fuel economy savings over conventional competitors ‑ and at a price point significantly lower than plug-in rivals (minus government subsidies). Or they must be new: they have to fill a segment outside the densely populated small hatchback or offer cutting-edge technologies that can grab some of the spotlight that Tesla, Nissan, BMW, and Chevrolet eat up with each new plug-in electric vehicle (PEV) introduction.
Ford has announced it will introduce a new dedicated hybrid – another small hatchback — to compete with the Prius in late 2018, and industry sources believe that Hyundai may also soon join the fray. But the wisdom of these introductions is questionable if current trends continue. Breaking into the cross-over market, as plug-ins are poised to do next year with the Model X and Mitsubishi Outlander PHEV, would do much to keep hybrids relevant. Bringing a diesel hybrid over from Europe would also help capture car buyers’ imaginations.
Tags: Automotive Industry, Clean Transportation, Hybrid Electric Vehicles, Smart Transportation Program
| No Comments »