Sales of Hybrids, Electric Cars Rising Fast
Although the media keeps telling us that hybrids and electric cars aren't selling well, the facts tell a different story.
For 2012, these vehicles were the fastest growing segment of US automotive sales, with close to 440,000 sold, according to market research firm Mintel.
About 3.3% of all the vehicles sold in the US last year were hybrids and electric cars, up from less than 1% in 2004.
Mintel expects sales of hybrids and electric cars to rise 14% this year to 535,000, and by 2017, sales should reach 850,000, making up about 5% of the US market.
Worldwide, the Prius hit the big time, now the third top selling car in the world.
Besides high fuel costs, they attribute this growth to the variety of new models introduced to the market in 2012. There are now 11 hybrid, plug-in hybrid and all-electric models on the market, quadruple the amount available just 12 months ago.
“New midsize hybrid models, such as the Toyota Prius v and Chevrolet Malibu Eco, have proven popular with consumers, in particular families, who want to buy green without sacrificing other features that fit their lifestyles," says Colin Bird, automotive analyst at Mintel.
"The segment will grow even further in 2013, with the launch of several new models, including the complete Ford Fusion Hybrid series, and the Honda Accord Hybrid, which will fulfill a wider variety of needs than conventional compact hybrids. Midsize plug-in hybrids will also enter the mainstream in 2013, with the introduction of the Ford Fusion Energi and the Honda Accord Plug-in, which will further improve mainstream acceptance of this, still, fairly novel powertrain segment.”
For electric cars, issues about charging the battery are still the big roadblock. People are still concerned about how far they can drive on a charge, whether public charging stations are near enough when they need them, and how long it takes to charge.
In May, automakers agreed on a standard for charging systems that promises to cut charging times dramatically, and there are now thousands of public charging stations in the US, and that's just the beginning.
Price is also still a factor for electric cars, but hybrids are getting close to the same price as conventional vehicles.
"If you look at vehicles like the Camry hybrid, the sticker price is actually the same as the non-hybrid," he says. "Manufacturers have been able to lower and eliminate that extra price," Jesse Toprak, head of auto market analysis at TrueCar.com, told Marketing Daily.
Although the Chevy Volt comes with a relatively high price tag, "When you look at the math, if you live in L.A., and you commute less than 20 miles one way, I don't understand why you wouldn't buy. You can lease for under $300 a month. If I spend $350 a month on gas, I would have essentially a free car," says Toprak.
Nissan just dropped the price of its electric Leaf by a substantial $6000 or so. It will be interesting to see if that leads to a spike in sales.
Peoples' attitudes toward hybrids and electrics are at an all-time high, according to a University of Michigan Consumer Sentiment Study, and apparently what people look for when they buy a car is changing.
"The 'live for today' mentality that prompted the rise of SUVs has disappeared," says Colin Bird, an automotive analyst with Mintel. "Consumers today demand products that promise protection and durability. There is a new mentality that emphasizes preparing for and protecting against potential future disasters, such as another oil shock or even just steadily rising prices at the pump."