July 2007 Looking Ahead

Are there storm clouds on the horizon for hybrids? The latest research from JD Power and Associates suggests there are. In July, the automotive consultancy released its 2007 Alternative Powertrain Study, which indicated that the number of carbuyers considering a hybrid had dropped—from 57% in 2006 to 50% this year. The study also found that buyers considering hybrids were willing to pay less for a hybrid than in the past, and that consumers had tempered their expectations on hybrid fuel economy gains.

JD Power’s findings fueled a surge of pessimistic articles about the future of hybrids. But is the gloomy outlook justified? Sure, hybrid consideration has declined somewhat, but a fall from 57% to 50% is hardly major movement (by the way, what’s the margin of error on those results?) If half of all carbuyers still have a hybrid on their list, that means roughly 8 million shoppers will think about putting a hybrid in their garage this year. That seems to give hybrids lots of room for future growth.

The study’s other findings don’t seem like much cause for concern either. Carbuyers are learning more about hybrids and about the real fuel economy they deliver, which for many models is quite good (although not quite as impressive as the old EPA ratings suggested.) It’s a positive thing that hybrid shoppers are making more informed purchases: in fact, one of the goals of hybridcars.com is to help potential hybrid buyers make educated choices. But market analysts should remember that for many buyers, hybrids are about more than just the dollars and sense of fuel economy. Buying a car that makes a small contribution to resolving environmental problems or our dependence on foreign oil matters to people as well. Neither one of those factors seems to be included in the latest research results.

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