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February 08, 2005  

J.D. Power and Associates Hybrid Car Forecast

If you follow hybrid cars, then you know one of the most cited hybrid analysts comes from J.D. Power, and his study is used in almost every hybrid vehicle market forecast.

Anthony Pratt, senior manager of global powertrain forecasting at J.D. Power-LMC, has stated for many months that hybrids will top out at 3 percent of the U.S. market by 2010, or roughly 535,000 vehicles.

Mr. Pratt typically starts out by noting how few hybrids have been sold, just 88,000 in 2004. Of course, Mr. Pratt doesn't mention that demand in 2004 has significantly out-weighed supply, nor does Mr. Pratt acknowledge the momentum gained by the technology behind the current Toyota Prius, Hybrid Synergy Drive.

Sales for next year, Mr. Pratt predicts will hit 200,000, or almost 1 percent of the market.

Toyota will easily move 100,000 Prius next year, and there are already more than 11,000 pre-orders for its Lexus RX400h hybrid SUV, the world's first luxury SUV.

 Hybrid Car Tax Credit
One-time $2000.00 credit available
If you purchase a hybrid vehicle in 2005, you might qualify for a one-time federal income tax credit .

Sadly, this tax-credit will be reduced in 2006, and phased-out the following year under current legislation (more)

    Toyota Prius




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The Lexus RX400h will be the hottest luxury vehicle on the market because you can be rich and still care! But seriously, early reports on this vehicle are glowing, and it is sure to win many awards. Forget the cost of the Lexus SUV hybrid. A few extra grand for the Best Lexus SUV won't mean much to Lexus customers.

Then there is the
Toyota Highlander hybrid. The Highlander hybrid has one of the sleekest, aerodynamic SUV designs and it will be powerful - even faster than the conventional Highlander - yet 30 percent more fuel efficient and significantly cleaner, producing far less pollutants.

Interest in this vehicle is phenomenal. Many potential consumers, and there are well over a 100,000 interested customers, believe they can now have their cake and eat it too. Not only can they have an SUV, but they can have piece of mind as well. Guiltless SUV style and performance, at a reasonable cost, is what the Highlander hybrid will offer these consumers.

Just those 3 hybrids alone could move more than 200,000 vehicles.

Whether Toyota can produce 200,000 hybrids next year is the real question. Additionally, since the Highlander hybrid might not hit the streets until mid-year, its prospects might also be limited.

And, I haven't even yet mentioned the Ford Escape hybrid, the Honda Accord hybrid, and the Civic hybrid - at least another 40,000 - 50,000 units.

And in 2010, Mr. Pratt thinks there will be 30 - that's right 30 - hybrid vehicles on the market. But this is insignificant, Mr. Pratt seems to believe, because efficient gas engines and diesel engines will challenge hybrids.

To that argument, Toyota has already stated that any advance in diesel or gas engines can also be utilized in hybrids. So, if an advanced gasoline engine can increase fuel economy by 20 percent, then a hybrid vehicle with a new gasoline engine can increase fuel economy by 50 percent.

Ultimately, Pratt's trump card is cost. Pratt claims that at $3000 - 4000 above the cost of their conventional cousins is too high for hybrids to be competitive.

Yet, buyers have been know to pay for better performance, particularly faster and quicker cars, which is exactly what the new generation of hybrids offer.

Perhaps the most important reason to believe that hybrids will achieve more than 3% of U.S. sales is Toyota, the most dominating and profitable car maker in the world.

Ford has stated that it envisions hybrids as an integral part of the future. Chrysler has been relatively quiet, and Honda is well positioned in hybrids offering the Insight, the Civic hybrid, and the Accord hybrid.

Those car companies, especially GM and Nissan, with the most to lose if hybrids become popular, are the biggest naysayers. Of course, these car companies have no choice but to be bearish on hybrids at this point in time.

Toyota, on the other hand, has the most to gain from hybrids and the most power to push them. With it's Hybrid Synergy Drive already used by Ford in the Escape hybrid (and other models soon), its Synergy Drive will also be used by Nissan and Subaru, and every one of those licensing deals makes Toyota's hybrid drive more cost-effective for Toyota, while putting more pressure on competitors.

Typically, in the long run, the best technology wins. Hybrid technology is the best auto technology available, but it is an emerging technology and it will advance. Just one major development in NiMH batteries could instantly make conventional automobiles almost obsolete.

Additionally, a vehicle like the Prius might just one day transition from gas-electric hybrid, to fuel cell-electric hybrid.

More important, the world has become a dangerous place over the last few decades because of one resource, oil. Americans might not know this, or believe it, but terrorists certainly do. Additionally, demand is rising and will continue to rise. To continue to be reliant on a resource with so many costs in terms of the environment and military protection is simply foolish.

Don't believe me? Even the ex-CIA director, James Woolsey, promotes hybrids because of the dangers of oil dependency.

Mr. Pratt and J.D. Power, on the other hand, aren't concerned about oil dangers, just continued advertising dollars from inefficient automakers.

In conclusion; however, I think American consumers are truly beginning to question oil dependency, especially foreign-oil dependency. If not for oil, there is no way the U.S. would ever have become involved in Iraq, where, ultimately, 100s of billions of dollars are being spent to secure foreign oil.

If that hidden cost of gasoline were added to the cost of gas-guzzlers, hybrids would sure look a lot cheaper.

 

Why vouchers for clunkers, but only credits for hybrids?

1,000,000 hybrid cars sold per year, but none American

Time to restore hydrogen and fuel cell funding?

Does the Volt really resonate in America?

Carbon schmarbon: It's foreign oil dependency, stupid

Jetta TDI better than the Toyota Prius?

Do Fisker and Tesla deserve government money?

Time to pull the plug on the Chevy Volt?

Would you buy a GM hybrid made in China?

How the UAW helped kill hybrids, small cars and GM

Ford's $20,000 hybrid?

Ford: Our hybrids are better

Is the Chevy Volt the wrong kind of plug-in hybrid?

Crude Awakenings on Peak Oil: Are we doomed?

Unimpressive plug-in Prius results?

Save Detroit: I think I need help

I hate gas guzzlers

Highway fuel economy is for suckers

Honda Civic Hybrid Testimonials




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