Electric-car sales are likely to be low-voltage


Even as General Motors Co. and Nissan Motor Co. get ready to launch electric cars into the marketplace, a new report from auto industry market research company J.D. Power & Associates said that sales of such vehicles would lack juice.

Technology geeks and environmentalists are expected to go wild over the first mass-market electric and plug-in hybrid vehicles when they hit auto showrooms in the coming months, but most consumers will balk because of technology concerns and because gas prices aren’t high enough to send them searching for an alternative-fuel option, according to the study.

Nissan plans to start selling its battery electric Leaf compact sedan by year’s end. General Motors is expected to launch its Volt, which uses an electric motor to drive the car and a gas engine that acts as a range-extending power generator when the batteries run out of power, around the same time.


J.D. Power said Wednesday that it expected combined global sales of hybrid-electric vehicles and battery-electric vehicles to reach just 5.2 million vehicles in 2020, or 7.3% of the 70.9 million autos expected to be sold that year.

The industry is expected to sell about 1 million electric and hybrid vehicles this year, a little more than 2% of global demand, the company said in its “Drive Green 2020” report.

The numbers for the U.S. market were expected to be a bit stronger. J.D. Power estimated that sales of the electrics and hybrids would make up about 10% of the 17.4 million in U.S. auto sales in 2020.

“We have a head start on other global markets, and so people here are more comfortable with the technology. Another piece is the cost, and since we have higher disposable income here, people have the ability to purchase a vehicle with a premium price,” said Tim Dunne, director of global automotive operations at J.D. Power.

The problem for this new generation of cars, according to the market research firm, is that gas prices remain too low to generate demand, consumers remain concerned about the technology, drivers worry about the range of the cars, and at the end of the day, they are just too expensive compared with conventional combustion-engine vehicles.

“Many consumers say they are concerned about the environment, but when they find out how much a green vehicle is going to cost, their altruistic inclination declines considerably,” said John Humphrey, senior vice president of automotive operations at J.D. Power. “For example, among consumers in the U.S. who initially say they are interested in buying a hybrid vehicle, the number declines by some 50% when they learn of the extra $5,000, on average, it would cost to acquire the vehicle.”


Humphrey said drivers are tripped up by how long one would have to own such a vehicle to realize cost savings on fuel, compared with a conventional car. They also worry about the cost of replacing depleted battery packs.

Still, there’s a passionate cadre of hybrid and electric car fans, Humphrey said. They are generally older, more highly educated — possessing a postgraduate degree — wealthier and with a deep interest in technology or who like to be among the early adopters of any new technology product. But that doesn’t describe the general population.

Power said that for sales of cars like the Leaf and Volt to take off, petroleum prices would have to rise significantly. Moreover, the industry needs technological breakthroughs that lower the cost of the cars and support consumer confidence in the batteries, power train and range of the vehicles. And finally, the electric-vehicle industry may need government policies to encourage the purchase of such cars.

Others see an easier road ahead for the autos.

“It’s not a matter of if, but how fast and to what extent different electrified vehicles will be adopted as we approach an electrification tipping point,” said Oliver Hazimeh, partner at PRTM, a consulting firm that follows the electric vehicle market.

He said that electric vehicles would make up 4% to 5% of the global auto market by 2020 and that plug-in hybrids would reach 5% to 6%. Hybrids like the Toyota Prius or Ford Fusion would account for another 20% of global auto sales.