Posts Tagged ‘Hybrid Cars’

Back in style again?

SUVs make a come back

Compared to last year US auto sales are up 17 percent and the biggest surprise in that turnaround is the increase in large SUV sales according to recent reports.

Large SUV sales have increased 19 percent. Compacts have picked up share, but sales are only up 14 percent. As of June, hybrid cars, on the other hand, have witnessed a 17.5 percent decline in sales.

Large SUV sales are good for automakers because it’s basically like “printing cash,” says Jim Hall at 2953 Analytics.

Nonetheless, since the gas spike of 2008 cars are still outselling trucks, so automakers – or consumers – appear to be learning how to redefine success in America using more efficient vehicle designs, at least somewhat more efficient designs. Of course, declining interest in hybrid cars during this same period of time demonstrates just how hard significant reductions in oil consumption will be to achieve.

Hybridcarblog

Hybrids. All about California?

What’s the problem with the king of hybrid cars?

Compared to last year, Toyota Prius sales are down more than 15 percent. Why?

Is it the depressed California auto market still reeling from massive losses in property values? Are buyers simply waiting for plug-in vehicles? Is it gas prices? The recall scandal? All of the above?

Not long ago I heard an auto analyst claim that California auto sales have improved from “horrible to bad”. Since a majority of hybrid cars are sold in the golden state, a drop in hybrid sales isn’t that surprising. Nonetheless, gas is still averaging .51 in the West – almost 75 cents higher than the national average. Coupled with some of the best hybrid deals ever, especially on the Prius, shouldn’t sales be rising, or at least holding their own in California?

Recently, some have argued on this blog that consumers are waiting for plug-in vehicles. Really? Last I heard there were only 10,000 people with 0 deposits on the Nissan Leaf. Likewise, GM has made it quite clear that Volt sales will be very limited by supply for at least the next few years. Can plug-in demand really be behind the lack of Prius interest – and hybrid car interest overall?

Then, of course, there’s the Toyota recall scandal; however, Prius sales haven’t tanked nearly as much as many other hybrid brands. So, a decline in Prius sales is certainly about more than just the recall scandal.

Ultimately, the decline in Prius sales is probably a mixture of all of the above, and even more variables.

The Future

So, what does the decline in Prius sales indicate for the future of hybrid cars and plug-in vehicles?

In recent months both Ford and Toyota have made very bullish forecasts for future hybrid sales, such as at least 20 percent hybrid by 2020. Likewise, Nissan has claimed as much as 10 percent EV by 2020, and the government has claimed 50 percent battery powered penetration by 2030.

What changes so dramatically in the next few years that we achieve such high levels of penetration when after a decade hybrids still can’t overcome even 3 percent penetration?

Certainly, it’s easy to claim that much cheaper battery prices are around the corner, and/or that much higher gas prices are inevitable since both assertions are probably true, at least to some extent.

Nevertheless, commodity prices will limit the downside cost potential of lithium technology at a price that will still be very hard to compete with gasoline and ever more efficient internal combustion engines, suggests a plethora of research. Higher gas prices, on the other hand, would mean consumers have less money to spend up front on transportation according to the studies. Thus, consumers would have to downsize into cheaper and cheaper vehicles rather than hybrids and plug-ins and their greater upfront costs.

In fact, to some extent, that is exactly what has happened since the recession and gas spike. Consumers have downsized into more efficient vehicles, but they have not converted into hybrid vehicles. And with the greater costs and limitations of plug-in vehicles, can a mass exodus from gas vehicles into plug-in vehicles really be expected?

The Toyota Prius has now been on the road for more than a decade. During that time, according to Consumer Reports, JD Power, etc., the Prius has been one of the most reliable and most repeat-buyer-coveted vehicles available. Additionally, many Prius hybrids with old battery packs – less technologically advanced – have survived not just 10 years, but hundreds of thousands of miles without a battery pack replacement. Therefore, newer NiMH-powered hybrids should have even longer life spans. Regardless, in terms of life span, the Prius has proven itself.

Ultimately, the Prius is an exceptionally efficient and likable vehicle, especially for urban commuters – a group of drivers that represents far more than just 2-3 percent of American commuters. And, today, the Prius deals are even better. More important, compared to the 2008 gas spike, for example, Prius buyers are today literally saving several thousand dollars up front on their purchase. (How much gas does several thousand dollars buy for a Prius driver, even at .00 per gallon?)

So, seriously, why are Toyota Prius sales down if the battery is on the brink of revolutionizing the auto industry? Where’s the disconnect?

Hybridcarblog

Can automakers profit from outsourced batteries?

Can automakers afford lithium?

Today, lithium is already available on the high end of the luxury hybrid market. Soon, however, lithium battery packs will be available in many other hybrids, plug-in hybrids and electric vehicles.

Still, can automakers derive a profit from lithium-powered vehicles?

Certainly on the high end, automakers are very capable of deriving profits from battery-powered vehicles. Of course, such vehicles represent only a tiny percent of yearly auto sales.

On the conventional side, with sedans and cars making up a greater portion of yearly auto sales, profit margins are more and more difficult for automakers to realize. Consequently, automakers are adding extra amenities and high tech features to increase vehicle pricing points. If costly batteries are added to this equation, will these cars become even more difficult to derive a profit, as well as too expensive for consumers?

Before the launch of the third generation Toyota Prius, high level executives announced that the king of hybrid cars would be powered by lithium, only to recant those statements as Toyota claimed that such batteries would simply be too expensive compared to NiMH. Certainly, compared to every other automaker, Toyota invested much more money into NiMH technology. So, considering the lack of competition, perhaps there was simply no real reason for Toyota to rush into lithium.

As Hyundai prepares to offer the new lithium-powered Sonata hybrid – without ever embracing NiMH technologies -  company insiders claim that Hyundai is contemplating bringing battery development in house to reduce a layer of costs.

Now, certainly, automakers can offset some of the development costs of battery-powered vehicles with the extra marketing capabilities such vehicles can provide. Yet, if battery-powered vehicles ever move beyond niche-status, will profits become harder and harder for automakers to achieve?

The bulk of the battery research, including consumer studies, suggests that automakers are going to have a tough time converting the public to plug-ins because of costs and/or limited capabilities, such as range. That almost certainly seems to suggest the thinnest possible profit margins to compete in terms of sales.

Or, if automakers can bring more and more battery production in-house, there is greater profit potential. Of course, there is also more complexity, potentially huge R&D and supply chain costs, etc.

Do auto makers have to become battery makers to succeed at electrification?

Only time will tell, of course, and different automakers are certain to try various approaches that could possibly lead to entirely different business models. One thing, however, seems certain. Without some major technological innovations in the battery industry, automakers will be required to be more innovative than ever.

Hybridcarblog

Will lithium help sell mild hybrids?

Just a glorified start/stop system?

While Honda was the early bird in the hybrid game, Honda’s hybrids have never been able to compete with Toyota Prius sales, and Honda’s less electric hybrid powertrain is one big reason for this difference.

Likewise, GM’s mild hybrid powertrain was even significantly less successful than Honda’s.

Of course, today, Honda is still selling mild hybrids, while GM is not. Eventually, however, GM will upgrade its mild hybrid powertrain with a new lithium battery pack and a few other tweaks.

Still, will mild hybrids ever be as successful as the Prius? Is there even a business case for mild hybrids?

According to a new report, just after 2012 selling mild hybrids might become more difficult than ever as direct injection and turbocharging become more common and cheaper in conventional vehicles, and as the costs of full hybrid cars, such as the Prius, decline.

Nonetheless, by 2015 there could be a market for up to 1 million mild hybrids worldwide per year – or 2 percent of global sales, the report notes. On the other hand the same research finds that full hybrids will achieve 3 times that sale’s figure.

Thus, it seems mild hybrid vehicles might develop into an interesting niche, but they will never compete with full hybrid cars. Moreover, the sale’s potential of mild hybrids could soon peak, just as full hybrids are projected to make serious gains in new vehicle market share.

Via Hybridcarblog

How much of a factor is the battery warranty?

A long term worry?

Today, GM announced that the warranty on the Chevy Volt battery pack will be 8 years, or 100,000 miles – whichever comes first.

Considering the expense of the battery pack, and the newness of the technology, is 8 years enough?

Rather than the 5 year or 100,000 mile warranty that is GM’s standard, GM will offer an 8 year warranty on the Volt’s power pack to help ease buyer skepticism. Still, 8 years seems a little short.

After even a decade, the battery longevity of conventional hybrid cars is still a major concern for most potential consumers. The Volt’s battery costs, however, are much more significant and much less proven than those in today’s hybrids. Moreover, based on the history of cell phones and lithium batteries, long term performance is a very legitimate issue, especially through the first few generations.

Then again, there should be enough early adopters to suck up the limited production planned for the first few years of Volt sales regardless of the warranty. Nonetheless, if greater long term adoption is planned, some kind of increased warranty – whether covered by GM or individual states – will probably be required.

Via Hybridcarblog