JD Power Sees 4X Growth in Green Car Market by 2016

The J.D. Power and Associates 2011 US Green Automotive Study indicates major growth in consumer interest in green cars—including hybrids, clean diesel, plug-in hybrids and pure electric cars. The market research firm expects as much as 10 percent of sales to come from vehicles with these fuel-efficient technologies by 2016. That would represent a four-fold increase in the sales numbers for green cars compared to 2010.

J.D. Power’s primary research included a study of more than 4,000 consumers who indicate they will be in the market for a new vehicle within the next one to five years. The study was fielded in February 2011, prior to the steepest rise in gas prices this year—which has increased interest in fuel-efficient alternatives.

Interest in the alternatives is unequivocal. More than half of the respondents said they would either definitely or probably consider a hybrid gas-electric car. Approximately one in three said the same for a diesel engine or plug-in hybrid car. There was similar high interest in battery electric vehicles, with more than one in four participants saying they would either definitely or probably consider an EV.

Carmakers appear ready to supply the growing demand. By the end of 2016, J.D. Power and Associates expects there will be 159 hybrid and electric vehicle models available for purchase in the US market—a significant increase from 31 hybrid and electric models in 2009.

The J.D. Power press release states, “Overall, the study reveals interest in alternative powertrain vehicles among a majority of consumers, with perceptions of green vehicles being largely positive.”

The study also states that improvements in the technology, improved infrastructure (for electric cars) and reduced costs—all anticipated in the near future—will help to overcome any obstacles and myths about these technologies.

“It is the financial issues that most often resonate with consumers, whether it is the higher price of the vehicle itself, the cost to fuel or charge the vehicle, or the fear of higher maintenance costs,” said Mike VanNieuwkuyk, executive director of global vehicle research at J.D. Power and Associates. Yet, public education campaigns and other efforts to familiarize consumers could help inform them that the upfront costs of the most fuel-efficient green vehicles are recouped in fuel-saving during the first few years of ownership.

Other respondents expressed concern about increased maintenance costs and compromised vehicle performance of electric-drive and diesel vehicles—apparently not realizing that many of these cars have faster acceleration than conventional models, while offering reduced maintenance costs on many components.

The study revealed growing recognition about how these vehicles can reduce the sting at the gas pumps. For example, 75 percent of consumers who indicate they would consider a hybrid electric vehicle cite lower fuel costs as a main benefit. In contrast, 50 percent cite “better for the environment” as the reason to buy a hybrid.