Survey Suggests Massive Potential Hybrid Market

While ongoing CAFE hearings discuss mandating eco-friendly and efficient vehicles, a survey by Deloitte says perhaps an even more powerful force in their favor is also in play.

This would be “Generation Y” consumers – those aged 19-31, alternately known as “Millennials.”

This demographic is the largest since the baby boomers and reportedly has a preference for hybrids and in-vehicle connectivity.

Of respondents to the Deloitte survey, 59 percent of respondents want an electrified vehicle.
Of Gen Y respondents, 57 percent said they were interested in hybrids, only 2 percent were interested in battery electric vehicles, and 37 percent wanted traditional combustion-powertrain vehicles.

If this portrayal is accurate, it means a profound push toward more gas-electric vehicles by a purchasing constituency numbered at 80-million strong.

What’s more, these are younger aged buyers who are forming these preferences. This means their sensibilities stand to influence – and challenge – the automotive market for decades to come.

“When millenials are ready to buy a vehicle, they consider nearly twice as many vehicles as baby boomers,” said Mark Fields, head of Ford Motor Co.’s Americas unit to Automotive News. “This is a generation of consumers that has to be reckoned with.”

Whether EVs would do well with this crowd at this juncture is in doubt. The number one reason in favor of electrified vehicles was improved fuel economy with no perceived downside.

According to Craig Giffi, automotive practice leader for Deloitte which conducted the survey, respondents were concerned for the environment, but did not want to be inconvenienced with contending with plugging in, he said.

Smart phones on wheels

Joe Vitale, global automotive sector leader for Deloitte’s parent company, Deloitte Touche Tohmatsu Ltd., said Gen Y consumers would spend more than $3,000 for in-vehicle connectivity.

What features would be worth spending that extra money for? Fifty-nine percent said the most important was in-dash technology, with nearly 75 percent asking for touch screens.

Observers note that automakers have been shown they have an opportunity to capitalize on these preferences, as 77 percent of respondents said they would like to buy more accessories and upgrades on an ongoing basis.

Somewhat Ironic Trend

The U.S. Department of Transportation has for the past few years held “summits” to discuss the “epidemic” of distracted driving.

In short, multitasking behind the wheel has been shown to be a threat or lethal.

The Gen Y respondents to the Deloitte survey are mindful of this reality. They still want a load of in-dash bells and whistles, but also want tech to improve their chances of not having the experience end badly – and are willing to pay up to $2,000 per car extra for it.

A desirable bundle of safety features for these connected hybrids includes collision-avoidance systems, blind-spot detection, and sleep-alert systems.

“It’s almost as if they’re saying ‘I’m going to be distracted, so I want the car to give me protection from myself,'” Giffi said. “The safety technology they want is the next generation of accident-avoidance technology.”

The survey included 250 Gen Y consumers from China, 300 from Western Europe, and 1,500 from the U.S. and is considered a statistically significant data sampling of where today’s Millennials place their priorities.

Automotive News, press release

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  • Van

    What is wrong with the knowledge base of the other 41%. Everyone should want a hybrid because that gets you more miles per dollar and less air pollution per mile.

    The problem is the hybrid premium of $5000 or so. With the current gasoline price (less than $4.00 per gallon) an average guy would only save $500 to $800 dollars a year and so the break even point stands too far in the future. Not in reality mind you, but in perception.

    I think the reduced air pollution – not green house gas emission – but the stuff that harms our health – should be presented more forcefully in the urban centers such as LA. Perhaps those same type of commercials like those used to make everyone aware of the hazard of smoking could be used to make everyone dislike tail pipe emission which poisons our air.

  • Jimbo Jones

    Prius = 150,000+ miles before brake change
    Normal car = 50,000 – 70,000 miles before brake change
    Savings = lots

    Prius = 10,000 mile oil change
    Normal car = 3,000 mile oil change
    Savings = 3x

    Just to name a few things people forget about that helps curb the cost of a hybrid over normal car.

  • JP

    Most of what you just said is inaccurate. If you had knowledge of how electricity is produced, you would know there is no drop in air pollution. The break even point is reality, perception has nothing to do with it.

    What would make this market segment more attractive is obviously a lower price, these cars are not selling rapidly to, as you elude to, the educated 59%. And, the technology is not there yet to have a rapid charge cycle, which is crucial.

  • Duude

    I’m curious how many new vehicles this new generation will be buying after we increase their payroll tax in an effort to fulfill the promise of medicare and social security to the much larger baby boom generation. Let us not forget the voting power of the baby boom generation together with what remains of those still older.

  • usbseawolf2000

    This car has no belt to change. No clutch to wear out. Emission equipment (including the battery) is maintenance-free, unlike Diesels. Starts at $19k. What’s not to like about this car?

  • Anonymous

    Here’s a video of the hot blonde Kate Bosworth driving away in her Lexus HS 250h.
    (For some reason, the comment thread in the HS 250h blog post won’t work.)

  • HybridoverPlugin

    Here’s a video of Kate Bosworth driving away in her Lexus HS 250h:

  • Van

    Well we now know one of the reasons for the flawed knowledge of the car buying public, posters like JP, who do not know hybrids put less pollution in the air, primarily because they burn less gas per mile traveled. This is not rocket science.

    Now as far as Plug-in vehicles, they put out even less air pollution.

  • AP

    Jimbo, normal cars do not require 3,000 mile oil changes. They are more like 7,000 to 10,000, depending on driving conditions. Your oil change center would like to see you in 3,000 to charge you more.

    Changing brakes cost very little compared to the hybrid hardware of about $5,000.

    Van, if a hybrid costs $5,000 more and saves $500-$800/year, there may never be a payback, depending on the interest you pay.

    Hybrids do produce slightly fewer (CO2) emissions, because of lower fuel consumption. Other pollutants aren’t affected.

    Electric cars produce about the same CO2 as gasoline-powered cars, depending on what makes the electricity. If it’s coal, electric produces MORE than gasoline, less if it’s nuclear or natural gas. Their other pollutants are someone else’s problem (whoever lives downwind from the power plant).

  • Anonymous

    “I’m going to be distracted, so I want the car to give me protection from myself.”

    Does anybody else find that extremely disturbing? As an automotive engineer, I find that naive and dangerous. All mechanical and electrical systems can fail. Putting your life into their hands when you can take control yourself is plain stupid. And when the systems fail, they will sue the manufacturer. It’s always someone else’s fault.

    It troubles me even more as a citizen. America was built on ambition and self-reliance.

    This is right out of Idiocracy.

  • Van

    When I was young, folks railed against automatic transmissions. Technological displacement is always fought by those with a vested interest in the past. But adapt of be left behind rules the world. Digital systems cannot yet drive our cars, but they can help in ways we may not like. An embedded GPS could first say “you are speeding” and then say “sending a violation report to your insurance company!”

    Hybrids are obviously way better than non-hybrids, but we still have those who deny reality. Cruise controls that turn off when you get too close to the vehicle in front is a good thing.

  • AP

    Van, I’m not saying that technology is bad. But using it as a substitute for watching the road is pathetic. Sensors may “see” other cars, but what about ice, potholes, loose gravel, etc.?

  • Van

    Hybrids burn less gasoline, therefore they put less pollutants into the air.

    Just a little on “pay back” Lets say I buy a Camry Hybrid for $32,000 rather than a non hybrid Camry for $27000. And lets say I paid 10% interest for 4 years. Looking at just the difference, I paid about $500 per year or 2,000 more due to interest, so the real difference was $7,000. I drive the car 4 years, and then sell the car. The Hybrid drops from 32,000 to 14,000 or a loss of 18,000 whereas the non-hybrid drops from 27,000 to 10,000 or a loss of 17,000. So the difference over 4 years is about $8,000 more, everything considered.

    Now my gas savings amounts to about $2500, so my Hybrid cost me about $5,500 over 4 years.

    But if I cook the books the other way, I buy a 32,000 Camry Hybrid, rather than a $35,000 Avalon non-hybrid. I borrow less and save money on gas and lose less in depreciation. And I am motivated to do this because I hate creating unhealthy air for kids.

  • Van

    Paying attention to driving, keeping our eyes on the road, and our mind on defensive driving is a good think. Digital systems can both train us to be better drivers, and sometimes protect us with automatic actions such as pulsating brakes and fuel cutoff.

    And in a more general sense, helping drivers drive more economically reduces air pollution and our funding of foreign countries with factions at war with us.

    We need our culture to embrace the idea that if you can afford a hybrid, buy one for the benefit of all.

  • AP

    Van, just so you know, burning less fuel doesn’t necessarily emit less carbon monoxide, unburned hydrocarbons, or nitrous oxides. It depends more on the emissons treatment on the car:
    LEV – Low-Emissions Vehicle
    ULEV – Ultra-Low-Emissions Vehicle
    SULEV – Super-Ultra-Low-Emissions Vehicle
    PZEV – Partial-Zero-Emissions Vehicle

    Depending on the exhaust treatment, a Toyota Tundra that guzzles gas could emit fewer pollutants than a Prius, except for CO2.

  • Van

    Let me address on more urban myth, that pollution does not equate with fuel consumption. Yes a high mileage vehicle with a malfunctioning emission control system could emit a disproportionate amount of pollutants. But on the other hand a Prius or Camry Hybrid scores a “9” on the pollution scale, whereas a non-hybrid Camry scores a “7”. Or to put it another way, given an “average” emission control system, which car emits more pollution, the one that burns the most gas.

    And to put it even more simply, when you burn gas mixed with air, you produce various by-products such as NOX and particulates. If your combustion system operates at the same level of performance, then burning less gas results in fewer emissions. This is not rocket science.

  • AP

    Van, you’re missing the fact that some cars have more elaborate and more effective pollution control devices in the exhaust system.

    You’re right that all engines produce about the same percentage CO, HC, and NOx into the exhaust system due to incomplete combustion. Burning more fuel means the engine emits more INTO the exhaust system.

    But that’s not the end of the story. Catalytic converters “finish the job” of combustion, some better than others. Let’s say a Toyota Tundra burns 4 times the fuel of a Prius. Now let’s say the converter in the Tundra is 99.9% efficient in eliminating the HC, CO, and NOx, leaving 0.1%. Now let’s say the converter on the Prius is only 99.5% efficient, leaving 0.5%.

    In this (hypothetical) case, the Prius would emit 25% more HC, CO, and NOx than the Tundra. Of course its CO2 would only be 1/4 of the Tundra’s, because it only depends on the amount of fuel burned.

  • Van

    If we take a peak at the EPA pollution score, a Prius gets a 9, the Tundra gets a 5. So you can make up hypotheticals till the cows come home, but in the real world, vehicles that get the best mileage on average get the best pollution scores for the reasons presented.

    The question we must ask ourselves why is this obvious truth being challenged, except to make a fictional case against buying hybrids. Hybrids are the wave of the future and if the buying public understands the math, they will buy them sooner rather than later.

  • Alfred Manch

    I agree with Van and I’m a believer that hybrids are the wave of the future, althought I believe all electric cars still needs way better development until they turn to be a good alternative to gas, that because of their short ranges with a single charge.
    Beside that, the charging takes too long and a single charge may not be enough for some people to travel to work and back home; I myself wouldn’t make it.
    Highways? Out of question, if you need to take the highways and travel at high speeds, all electric cars are trully not suitable for that.

    Step Down Transformer

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