Some say "No plug, no deal," but not everyone is gonna buy that
This week, the Reuters/University of Michigan Surveys of Consumers found that plug-in hybrids have to be "affordable" if automakers think that customers will want to buy them. People are interested, U of M says, but cost is paramount to people deciding to make a purchase. Speaking at the Business of Plugging In conference in Detroit this week, Richard Curtin, from the University of Michigan's Institute of Social Research, said that at $10,000, 56 percent of the people surveyed said they wouldn't even consider it. At $2,500, a third were "very eager" to buy a PHEV. Note that the price difference there is the biggest tax credit that the federal government is offering for plug-ins with battery packs that have 16 kWh or more. Curtin also said that this is not VHS vs. BetaMax redux, with the loser becoming obsolete – the way plug-in vehicles did in the early 1900s – but even if plug-ins don't immediately dominate, they can at the very least find a niche audience. With the right price, they will be tremendously popular because there are many people who want to demonstrate their commitment to the environment. Price them too high, and people will be happy to keep dealing with the downsides of gasoline.
[Source: U of M]
Reader Comments (Page 1 of 1)
Mark Kiernan 8:19PM (10/23/2009)
My next car will be a plug-in no matter what, but for the general public it is important in the first stage to education them on the payback is covered over a period of time. Sadly the majority of buyers will not care about the environment so the economic advantage must be stressed, this will become less necessary when EVs and ICEs arrive at a retail price parity.
Reply
why not the LS2LS7? 9:03PM (10/23/2009)
The match just doesn't work on a plug-in parallel hybrid for most people. A Prius has an annual predicted fuel cost of $774/year. If you can make 100mpg, you can cut that in half to $385 and save a whopping $385/year. It's nearly impossible to create a system cheap enough to lower total cost of ownership for the average person.
This is why high efficiency cars have trouble selling. It's why hybrids are "lifestyle" cars. Parallel plug-ins are tough to make make financial sense. Serial plug-ins (EREVs like the Volt) have somewhat of a chance to improve, because if you drive them in the fashion they are designed for, you can use little to no fuel. But the up-front cost on these is much much higher, creating an additional problem.
why not the LS2LS7? 8:59PM (10/23/2009)
If plug-in parallel hybrids (PHEVs) make it to the market before EREVs catch hold, it will be a huge hurdle for EREVs to overcome. Much like the GM 5.7L Diesel soured Americans on Diesel for a decade or more.
PHEVs just don't make any sense unless you make a ton of very, very short trips at very low speeds. So if you're a messenger, good on you. The rest of us won't see any advantage and may even feel ripped off.
Reply
hermperez 10:38PM (10/23/2009)
"PHEVs just don't make any sense unless you make a ton of very, very short trips at very low speeds. So if you're a messenger, good on you."
Your argument makes sense if the planned plug-in Prius had a weak electric system..but it does not, it can do up to 62mph without the ICE spinning (faster if you let the ICE spin but with the fuel shut off) at a moderate rate of acceleration.. and this is just the first iteration of the plug-in Prius. Toyota can modify it as needed.
There really is very little difference between a serial or parallel plug-in, its all a matter how it is implemented.
xyz 9:39PM (10/23/2009)
No plug - no deal for me! And since I have two cars it will be a pure EV. Driving along in silence is just great.
Reply
Tony Belding 9:42PM (10/23/2009)
I have believed for a while that widespread acceptance of plug-in cars is dependent on gasoline availability. Not many people are going to spend more money or make any big changes in their usual habits just to be "green".
However. . . When gasoline is $10+/gallon, and when you have trouble finding any stations that are still open with gas to sell, and when you need a ration card to buy a few gallons from the few that are still operating. . . Then many, many people will be willing and eager to pay a large premium for a plug-in car.
This isn't a science fiction scenario. If the Peak Oil crowd are even half-right, it's not very far in the future.
Reply
Dave 9:52PM (10/23/2009)
The problem with that theory is that you don't need gasoline to run an ICE.
We can switch to natural gas, ethanol, methanol, ammonia, etc.
Its a shame that we're wasting so much natural gas on electricity production. We should be saving it to run our cars and heat our homes if and when oil becomes unbearably expensive.
We need more nuclear and renewable power plants.
Ignatius 12:24AM (10/24/2009)
While I agree with you on the fact that we need more nuclear power plants... compressing gas and taking it at high pressure is NOT a good idea.
http://www.cleanmpg.com/forums/general/t-cng-honda-civic-car-fireexplosion-dialup-warning-many-photos-7555.html
CNG is incredibly dangerous and any other gas stored at high pressure, especially if it's flammable.
tifosiotaku 1:55PM (10/24/2009)
lol your doomsday scenarios.
Ray 1:07AM (10/24/2009)
Removing some subsidies to the oil companies thus raising the price of gas closer to it's true price would make EV's vehicles more valuable. Keeping the money for fuel over here instead of exporting it.
Reply
Zen Rider 1:13AM (10/24/2009)
The ultimate replacement for oil will be oil from a renewable source. There are molecular biological studies going on right now that are producing a bacteria that eats carbon and produces oil as waste. http://www.nextnature.net/?p=2495 or google "bacteria that eats carbon and shits petrol" you will see lots of news articles about it. The great thing about replacement fuels like these is that they take advantage of our existing infrastructure. Don't waste your money or your time on plug-in vehicles. Most electricity also comes from the burning of fossil fuels and so it is simply a transfer of resources not a replacement.
Reply
Ray 1:19PM (10/24/2009)
Oh good so your saying I can continue to pay oil companies to make oil and charge me for it. Terrific I get to continue to be sold fuel, air and oil filters and all the rest of the maintenance as well as pay for fuel that only a huge oil company will be able to provide.
No thanks I have become to use to getting fuel from solar panels to drive 12,000 miles per year. Your saying I can continue to use domestic made fuel to run a inefficiant vehicle where a third of the fuel is wasted in heat and have the oil companies taking money out of my pocket at what ever rate they choose in tax subsidies and profit. I have had enough of that.
My motor will last for a million miles, your car 200,000 if your lucky. If I was stuck in traffic my car will sit there and idle for 96 hours straight, your car will run out of gas. Down hill my car useses no fuel but in fact refuels while your car uses gas even going down hill. My car refuels it's self coming to a stop. Your car waist the braking energy in heat much like your engine does. Your car is just to inefficiant and relies on big corporations, if you like these corporations running your life and dictating to you how it's going to be, your car is great.
oollyoumn 5:15AM (10/24/2009)
These statistics don't look good for the Volt. If 56% won't even consider PHEV if the price premium is $10k, what does that do to the Volt? The Cruze should start at about $15k to be competitive, and the Volt will start about $40k. With a $25k price premium, I suspect the percent that will not consider goes well north of 95%. If the Volt is about the cost of a gas Focus and a BEV Focus combined it will be a hard sell.
Reply
Boyprodigy1 4:13PM (10/25/2009)
Everyone knows that GM made a huge mistake by focusing a little too much on the luxury of the volt and not the economic side of it. How about you make a point about the technology and not the company, because the technology is actually a lot less expensive than GM is playing it out to be with the volt.
Nick 7:48PM (10/24/2009)
I spend about $250 a month on gas x 12 = $3000 / year.
-->I keep my cars about 4-6 years, so I will have spent up to $15,000 on gasoline.
And you're saying that paying an extra $2500 at purchase does not make financial sense?
My next vehicle is an EV, I can guarantee you that.
Reply
Andy 12:54AM (10/25/2009)
Price is what the customer will pay, it is not really related to manufacturing cost. Even if EV's were cheaper than ICE to manufacture. Companies would still charge a premium for EV's knowing that customers can save on operating costs.
It's unlikely that any business will offer a total cost of ownership package for an EV that is actually cheaper than an equivalent ICE. Given the same utility as an ICE, the EV will offer a better driving experience. There's a premium to be paid for that too.
Given the low gas prices in the US and generally longer distances traveled. US will be one of the harder markets to penetrate based on TCO.
It's anyone's guess how fast BEV's will penetrate the market. Given the fundamentally cheaper operating costs and ubiquity of the electric fuel supply, BEV's should win out eventually.
I don't support the "battery cost too high" mantra we hear so much. It's just a matter of time before (Battery + electricity) costs will be lower than (ICE + fuel) costs over the lifetime of a vehicle. Oil is a finite commodity.
When battery manufacturing reaches a suitably high manufacturing capacity, wholesale battery costs will come down significantly and the tipping point will have been reached.
Reply