Hybrid electric vehicle sales expectations are lowering due to changes in some car makers’ plans, which is contributing to higher-than-expected vehicle costs, according to the latest JD Power and Associates 2003 Hybrid Electric Vehicle Outlook.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Some car makers have revised their plans to produce hybrid electric vehicles, with many delaying the release of some hybrid vehicle models or dropping models from their hybrid programme altogether. In addition, the price premium charged to consumers for a hybrid powertrain option is expected to be higher over the next several years than previously expected. With these two factors combined, JD Power and Associates expects US consumers to purchase approximately 350,000 hybrid vehicles annually by 2008, down from previous expectations of 500,000.
“The hybrid-electric vehicle market has undergone some significant changes over the past several years, and those changes have caused many of the manufacturers to adopt a wait-and-see approach,” said Walter McManus, executive director of global forecasting at JD Power and Associates. “Hybrid electric vehicles are still a growing portion of the market, but their share is rising at a slower rate than we previously expected. Higher-than-expected initial retail prices will slow sales growth, and slower sales growth will keep prices high.”
Hybrid sales are expected to reach 40,000 units in 2003 with only three hybrid electric models currently on the market. However, manufacturers are preparing to introduce a dozen new hybrid electric models over the next two years, and hybrid sales are expected to exceed 177,000 by 2005. A total of 28 models – 18 truck and 10 car models – are expected to offer hybrid powertrain options in 2008.
“Sales should increase dramatically as more hybrid vehicles, especially in segments other than compact cars, become available,” McManus said. “But we still don’t expect hybrid-electric vehicles to become mainstream any time soon.”
The first hybrid electric model in the US market was the Honda Insight in 1999. The Toyota Prius debuted the following year, and the Honda Civic Hybrid went on sale in 2002. The first full-size pickup hybrids – Chevrolet Silverado and Dodge Ram – hit commercial fleets this year and will reach retail dealers in early 2004. The first SUV hybrid, the Ford Escape, will also reach dealerships in 2004.
“Trucks should account for about 35% of hybrid sales by 2005 and 64% of hybrid sales by 2008,” McManus said. “We know, based on JD Power and Associates studies, that consumers express interest in a hybrid powertrain option in the same segments as their current vehicles. Trucks generally are more popular than cars, and they will be more popular in the hybrid market as well.”
While hybrid vehicles are stirring up interest among consumers, these vehicles will only represent about 1% of the market by 2005 and reach 2% market share by 2008. Honda should see its share of the hybrid market soar to 58% this year based on strong Civic Hybrid sales. As other manufacturers enter the hybrid market, Toyota’s hybrid share is expected to drop from 39% in 2003 to 20% by 2008 – about the same as Honda’s projected share for 2008. General Motors is expected to see growth from less than 2% market share in 2003 to nearly 33% by 2008. DaimlerChrysler’s share of the hybrid market should increase from slightly more than 1% in 2003 to nearly 15% by 2008, while Ford Motor Company’s share should grow from 0% in 2003 to 6% by 2008.
