Economic Factors Shape Consumer Attitudes on Green Vehicles

Christopher Malott

When asked to consider a hybrid electric (HEV), plug-in hybrid electric (PHEV), clean diesel engine or battery electric vehicle (BEV) for their next new-vehicle purchase, a large proportion of consumers express interest in at least one of these options.

While vehicle price remains a primary concern impeding consideration of these powertrains, the ability to save money on fuel costs through improved economy is the most often cited benefit of ownership, according to the  J.D. Power and Associates 2011 U.S. Green Automotive Study.SM

However, even though the financial benefits relating to fueling are recognized by these consumers, oftentimes the upfront price premium of an alternative powertrain option is too high to overcome. Price, in fact, may become a more prominent concern for consumers considering HEVs and clean diesel engines, since tax credits from the Energy Policy Act of 2005 were phased out at the end of 2010. Continue reading ›

Near-Term Green Vehicle Growth Remains Limited

Growth of alternative powertrain vehicle sales in the near future will be limited by consumer concerns about costs as well as functionality, according to our new J.D. Power and Associates 2011 U.S. Green Automotive Study.SM In fact, our Automotive Forecasting division projects that the share of hybrid and electric vehicles will remain below 10% of the US market through 2016.

Mike VanNieuwkuyk

Alternative powertrains face an array of challenges as automakers attempt to gain widespread acceptance of these vehicles in the market. It is the financial issues that most often resonate with consumers, whether it is the higher price of the vehicle itself, the cost to fuel or recharge the vehicle, or the fear of higher maintenance costs. The bottom line is that most consumers want to be “green,” but not if there is a significant personal cost to them.

In addition, despite a rapid increase in the number of alternative powertrain vehicle models expected to reach the market during the next few years, automakers will be competing for a relatively small number of consumers who are willing to drive green. By the end of 2016, J.D. Power expects there to be 159 hybrid and electric vehicle models available for purchase in the US market. This is a significant increase from the 31 hybrid and electric models that were available to buyers in 2009. Continue reading ›