Together in electric dreams

Despite the popularity of hybrid and electric vehicles (HEVs), there is still a large petrol-coloured river to cross before they are truly accepted as a form of mass transport, as a recent report from hybrid and electric vehicle group IA-HEV explains. The report, An Outlook For HEVs, looks at the market for HEVs over the next six years (until 2015) and reviews the trends, challenges and behaviours that are shaping expectations.

Growing steadily
The report starts off, not surprisingly, by pinpointing the relatively high price of HEVs as a major problem. But despite the price disadvantage, the authors are optimistic that the combination of industry support (at last!) and government incentives is starting to bear fruit, as the increasing numbers of HEVs on the road demonstrate. Indeed, HEV sales grew in many countries in 2008, despite it being a terrible year for car sales overall.

This growth is expected to continue, as HEVs become ever more fuel efficient and more models become available. IA-HEV suggest that larger production volumes should lead to lower prices. In addition, incentives for more energy efficient and low-emission cars, such as tax reductions and entry rules (like congestion charging or low-emissions zones), could prove particularly influential in urban areas.

Against this background, it is forecast that HEV sales could triple to 2.2 million by 2012, although HEVs’ share of new vehicles sales is still unlikely to break the ten per cent-barrier before 2015 (the share today is around two to three per cent).

Purely electric

Compared to hybrids, the market for purely electric cars is still small. However, it does include some great success stories where electric vehicles (EVs – keep up, more acronyms on the way!) offer clear benefits to drivers. In Norway and Switzerland, for example, EV drivers (not always of cars, EVs could be electric three-wheelers or bicycles) benefit from faster commuting, easier access to city centres, easier parking, lower operating costs and, sometimes, a positive image.

Plug-in developments
New developments are picking up speed in the plug-in hybrid electric vehicle (PHEV) market, although most are still in the prototype phase. Car manufacturers such as Toyota and Ford are developing PHEVs from modified HEVs. These are capable of operating all-electrically and being charged from the mains.

But General Motors could beat them to it with their Chevrolet Volt, a brand new design of Extended Range Electric Vehicle (EREV – that’s the last one, I promise) which they aim to bring to market in 2010. (Although given the parlous state of affairs at GM at the moment, the 2010 target might be a little optimistic. Do Fiat do electric cars?)

Other manufacturers are expected to follow, but the market share of PHEVs compared to HEVs is still expected to be small.

Shaping the future
Relatively high purchase costs are still seen as the main reason why HEVs are not taking a larger percentage of total car sales. However, as overall supply increases, prices may go down. The attraction of being different or having a green image are also said to be important driving forces for owners. For a larger market share, whole-life financial savings need to play a much bigger part in purchase decisions, including the re-sale market for HEVs.

As the impact of the economic slump is felt, sales of gas-guzzlers are declining and the use of public transport and sales of smaller cars are increasing. This could be good news for HEVs. However, that same economic uncertainty makes it difficult to predict the precise impact on the HEV market.

Younger drivers who have grown up with electric powered technology are also seen as key influencing factors in the growth of the market. Moreover, the higher proportion of young people living in urban centres makes them particularly susceptible to the benefits of HEVs.

Governments, too, have a crucial role to play, by funding research, introducing more incentives (and penalties) around emissions and energy efficiency (including tax policies), supporting the development of suitable infrastructure, and helping to raise awareness and influence public opinion.

Keep then engine running
So, a bit of a mixed bag really. Public opinion seems to be moving the way of HEVs and PHEVs. It is up to the industry, the big car manufacturers, and the authorities to keep the momentum going. (Maybe legislation limiting the use of acronyms on the hybrid electric vehicle market could be a starting point?)

Related web source

• Download the full 2009 Outlook right here (from the IA/HEV website)