With the largest market for new vehicle sales at over 23.5 million in 2014, significant smog issues, and lofty goals for hybrid and plug-in electric vehicle (PEV) sales growth, China has long been seen as the biggest global opportunity for plug-in and hybrid vehicles. That hope has failed to materialize, with PEV sales through 2013 never surpassing 20,000 and hybrid sales far weaker. However, signs of a robust PEV market in the country are finally emerging, with 2015 sales figures indicating around 28,000 PEVs sold through April, just a few thousand less than the nearly 32,500 sold in the United States during the same period.
These figures are encouraging, but it should be noted that many of the PEVs sold in China would not qualify as highway-capable vehicles in the United States; therefore, these comparisons aren’t exactly apples to apples. Regardless, for hybrids like the Toyota Prius, there isn’t much to say except that compared to the number of plug-in options now being sold in China, there are few hybrids.
Toyota and Honda have long tried to jumpstart hybrid sales in the country, but dismal sales figures have been consistent. Since 2005, Toyota has only sold 90,000 hybrids in China. In late April, Toyota once again announced it was doubling its efforts through two new hybrid platforms scheduled to be introduced sometime this year as part of a grand strategy to make hybrids account for 30% of the company’s sales in the country. Given Toyota’s goal of doubling current annual sales in China, this 30% could mean up to 600,000 hybrids annually.
Though sales of hybrids still outpace PEVs in most major markets globally, market share is beginning to lag in established markets while PEV sales continue to grow, specifically in the United States. In fact, since the beginning of 2014, monthly year-over-year sales of hybrids in the United States have fallen in every month, with the exception of May 2014. It is likely that more expensive PEVs with significant energy cost savings and lucrative government incentives are cutting into the established PEV market share. However, it’s also likely that less expensive fuel efficiency gains through stop-start technologies, engine downsizing, and vehicle light-weighting alongside low oil prices are also having an impact.
Monthly Hybrid Sales, North America: 2013-2015
(Source: Navigant Research)
Caught in between low-level, inexpensive fuel efficiency improvements and expensive alternative fuel options with significant incentives and energy costs savings, the plugless hybrid business case is eroding. Prospects for the platform are not likely to improve, as stop start technology is likely to permeate rapidly through the global automotive industry and PEV costs continue to decline. In China, the steady flow of new PEV introductions alongside growing interest in stop-start batteries could negate hybrid interest altogether, making Toyota’s 30% hybrid by 2020 goal difficult—if not impossible—to achieve.
Tags: China, Electric Vehicles, PEVs, Transportation Efficiencies, Transportation Forecasts
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