Hybrids Match Conventional Cars On Benefits

    CLEVELAND--Jan. 9, 2003--A new Freedonia Group study covering light vehicle powerplants in the United States illustrates how dramatically hybrid-electric automobiles have closed the performance gap with traditional gasoline-powered cars. Lance Ealey, Director of Freedonia Group's automotive practice, indicated that the key challenge for hybrids will be in achieving cost parity with traditional light vehicle powerplants.
    "The hybrids built by Toyota and Honda are already quite competitive with gasoline engines today," said Ealey. "The remaining issue is to bring costs into line with those of gasoline engines, which will begin to occur as production volumes rise."
    The report includes a price versus benefits analysis, which plots the relative benefits of examples of hybrid-electric vehicles compared with selected diesel and gasoline-powered automobiles. In this case, the vehicles tend to be from the subcompact and compact automobile segments, with a few higher segment (but similar) gasoline-powered vehicles added to more firmly establish the gasoline fueled, spark ignition powerplant composite line.
    The factors included in the benefits index are: city fuel economy expressed in miles per gallon; 0 to 60 mph acceleration time; 60 to 0 mph braking distance; vehicle range in miles on one tank of fuel; interior passenger space measured in cubic feet; cargo space measured in cubic feet; and the current retail value of a one-year old used version of the models studied. Finally, each of the elements of the benefits index was weighted according to indicated customer perceptions of importance, to more fully replicate true customer demand.
    "It is striking how close the hybrids already come to the spark ignition powerplant composite line," said Ealey. "Clearly, the strategies of Toyota and Honda have been to match performance first, then work to reduce price. What's also interesting is the performance parity between the hybrids and the Volkswagen turbo diesel, with both technologies having a price premium versus the gasoline engine vehicle."
    The analysis is part of a new report by Freedonia Group: Hybrids and Competing Automotive Powerplants (Study 1617). The 245-page report forecasts demand for light vehicles equipped with gasoline and diesel internal combustion engines, full and mild hybrid electric powerplants and fuel cells in the US through 2011.