Is the Move to Hybrids Hyped?

How popular will electric and hybrid cars be in 10 years? Depends on whom you ask.

According to a new report by J.D. Power & Associates, the auto industry analysis firm, the sales potential of electric and hybrid vehicles is “over-hyped” and “more hope than reality.” Globally, electric and hybrid vehicles will make up little more than 7 percent of all passenger-vehicle sales by 2020, the firm estimates.

This year, just 2.2 percent of the more than 44 million vehicles expected to be sold globally will employ some kind of battery propulsion system.

Other industry forecasts are far more optimistic. A 2009 report by the Boston Consulting Group, for instance, estimated that electric and hybrid passenger vehicles, together with those powered by compressed natural gas, could constitute 28 percent of the market.

This more bullish outlook is shared by other industry analysts as well as by automakers like Nissan and General Motors, which have poured millions of dollars into developing gas-electric hybrids like the Chevy Volt and all-electric cars like the Nissan Leaf.

Yet consumer research shows that many potential buyers are not ready to make the leap, J.D. Power said. Concerns include the cars’ reliability, power and performance, and how far all-electric models can travel on a single charge — so-called “range anxiety.”

The significant price premium for electric and hybrid vehicles is another major sticking point despite the long-term savings consumers can expect from buying less gasoline.

“Consumers will ultimately decide whether these vehicles are commercially successful or not,” John Humphrey, senior vice president of automotive operations at J.D. Power, said in a statement. “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.”

Still, the pessimistic forecast of J.D. Power is tempered by some interesting caveats regarding energy prices, technological advancements and government policy.

For example, a “significant increase in the global price of petroleum-based fuels” could result in a major market shift away from conventionally powered vehicles, the report acknowledges. Technological breakthroughs that reduce the cost of hybrid or electric cars or government policies that substantially promote alternatively powered vehicles would also boost sales.

“None of these scenarios are believed to be likely during the next 10 years,” the report concludes.

But while consumer choice may indeed hinder the short-term prospects of electric and hybrid cars, even the skeptics at J.D. Power acknowledge that the age of the internal combustion engine will not last forever. As oil supplies eventually peak and subside, battery-propelled vehicles will by necessity fill the void, they say.

“Experts disagree about when global oil production will peak (if it hasn’t already), but virtually everyone would agree that oil is a finite resource and that at some point in the future it will either run out or, more likely, the energy required to discover and produce new sources of oil will be greater than the energy received from harvesting it,” the report states.

“In either case, oil will have run its course as the primary fuel powering the internal combustion engines that drive traditional vehicles.”

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