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A recent study by leading automotive forecaster J.D. Power and Associates revealed that the market for green cars still has a long way to go. It is likely that less than 10% of the market will be sales of hybrids or electric vehicles despite the fact that gas is $4.00 a gallon in many states across the country.
Alternative power train vehicles face a difficult and daunting task of trying to win over consumers that are concerned with their budget. The upfront additional cost of a green vehicle is generally in the thousands of dollars when compared to a standard petroleum burning automobile. That increase in price serves as a drastic turnoff to drivers that are otherwise interested in going green.
Car manufacturers are working to hit a comfortable medium between manufacturing and price. A car is simply not successful if the benefits it provides are not realized because the public is not buying the vehicle. The heavy investment that manufacturers put into green technology and subsequent development make it difficult to provide lower prices on hybrid or electric cars.
Small car sales are rising in the face of increases in gas prices. The smaller models are able to provide upwards of 35 miles per gallon or better so have quickly become a consumer favorite. They have captured much of the market attention because of this consumer interest.
Hybrid sales are currently increasing even though Congress let the tax credit on their purchase expire. The first quarter of 2011 saw an increase in sales by approximately 37%. Clean diesel automobiles are beginning to make a larger impact in the United States. Manufacturers have typically not offered diesel here due to high tax rates and poor public perception. The rates of normal petroleum are comparable or higher in many places.
Clean diesel vehicles also need to shed the negative stigma that diesel is somehow “dirtier” than standard fuel. Affecting this public perception is difficult for automobile manufacturers to invest in as the tangible benefit to the bottom line is simply not there versus the investment.
Regardless of the routes taken, it is projected that upwards of 68% of automobiles will be hybrids and nearly 15% will be electrics by 2025. Many automakers are expected to introduce diesel automobiles to the American market after the success of Volkswagen AG posting 24% of its first quarter sales being diesel.
