Market Trends for Hybrid and Electric Vehicles
Hybrid electric vehicles and battery powered electric vehicles were supposed to disrupt automobile industry. So, have they lived up to the hype? Not just yet. To effectively make a ‘huge splash’ in the marketplace, hybrids and electric vehicles need to increase their aftermarket product impact by biting onto a larger share of the United State’s new vehicle market.
New Vehicle Volume
Statistics on the U.S. new car and light truck market provide a bittersweet picture of electric cars and hybrid vehicle sales. Whereas the new vehicle volume of hybrid vehicles dropped 33% between 2013 and 2018, electric car sales tripled in the same period. Their combined annual market share increased by a mere 1% from 2013 to 2018.
Growth Barriers: What is Holding Back Hybrid and Electric Vehicle Sales?
- Purchase Price: The initial price is a significant determinant of a consumer’s buying decision process. What is my level of disposable income? Are there cheaper alternatives that satisfy the same need? Currently, the answer to the latter is probably yes. Internal combustion vehicles are up to 25% cheaper than battery electric vehicles. Many consumers opt for conventional models after being discouraged by prices of hybrid and battery electric vehicles.
- Maintenance Costs: Generally, when we talk about maintenance costs, we are referring to replacement costs and battery life. The replacement cost of the battery system is so high that the battery life sometimes determines the operating life of electric and hybrid vehicles. With the high maintenance costs and the purchase price, it is not a surprise that these vehicles are struggling to make an impact in the car and light trucks market.
- Operating Range: Aside from monetary constraints, performance plays a crucial role in the automobile industry. The operating range of electric and hybrid vehicles is limited in comparison to their gas-engine counterparts. Although there are commendable strides towards increasing the driving range of battery-powered vehicles, they still fall below the standards set by conventional models.
How can the aftermarket impact of hybrid and battery electric vehicles be boosted? We need an intuitive charging system infrastructure, a reduction in purchase price, and relevant technological breakthroughs. These are necessary developments to overcome the barriers that are responsible for the arguably poor 2018 statistics of electric (0.5%) and hybrid (2%) vehicles on U.S. roads.