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Hybrid and Electric Cars - US - April 2018

"Vehicle fuel economy is a top concern for Americans and their automobiles. Americans have seen gas prices go over $3.50 as recently as 2014, so many remember the pain of filling up a gas tank at those prices. Consumers are also increasingly aware of their environmental impact, and seek ways to minimize pollution and reduce their carbon footprint.
Both the federal government and some state governments have made reducing vehicle emissions a priority, and have promoted more fuel-efficient cars by imposing fuel economy standards, emission standards, and providing tax incentives for hybrid and electric vehicles.
Despite increasing tax credits, the number of alternative energy vehicles sold have remained a minimal fraction of the total new car market, but attitudes seem to be shifting as governments across the globe announce plans to phase out traditional internal combustion engines. Car owners and shoppers seeking to reduce their spending at the gas station or are environmentally conscious have had an increasing number of hybrid and electric vehicle models to choose from in recent years, with even more planned for production in the next few years."
- Buddy Lo, Automotive Analyst

This Report looks at the following areas:

  • Hybrid and electric vehicle sales and forecast
  • Hybrid and electric vehicle ownership and consideration
  • Attitudes toward hybrid and electric vehicles

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Exposure to hybrids and electric vehicles limited to households with higher incomes
              • Figure 1: Hybrid and electric vehicle ownership, by household income, February 2018
            • Nearly one in four current owners live in California
              • Figure 2: Hybrid and electric vehicle ownership, by geographic area, February 2018
            • Mild Hybrids expected to decline
              • Figure 3: Total US sales and fan chart forecast of mild hybrid vehicles, by units, 2012-22
            • The opportunities
              • Consideration rates for alternative energy vehicles are high
                • Figure 4: Hybrid and electric vehicle consideration, February 2018
              • Previous ownership drastically increases consideration
                • Figure 5: Hybrid and electric vehicle consideration rates, by HEV/EV ownership, February 2018
              • More than half agree EVs are the future and society should transition to emission-free transport
                • Figure 6: Attitudes toward hybrid and electric vehicles, February 2018
              • iGens and Millennials show highest interest in alternative energy vehicles
                • Figure 7: Hybrid and electric vehicle consideration, by generation, February 2018
              • What it means
              • The Market – What You Need to Know

                • Alternative energy market forecasted for growth through 2022
                  • The stakes are high for Tesla and its Model 3
                    • Luxury brands have an outsized presence in the alternative energy market
                      • SUVs and crossovers accounted for one in five AEV sales
                      • Market Size and Forecast

                        • Alternative energy vehicles forecasted for growth through 2022
                          • Figure 8: Total US volume sales and fan chart forecast of alternative energy vehicles 2012-22
                          • Figure 9: Total US volume sales and forecast of hybrid and electric cars, 2012-22
                      • Market Breakdown

                        • Hybrids and electric vehicles remain minimal fraction of overall automotive market
                          • Figure 10: Percentage of new vehicle sales, by alternative energy vehicles, 2009-17
                        • Plug-in vehicles, both PHEVs and EVs, are gaining market share
                          • Figure 11: Percentage of total alternative energy vehicle sales, by alternative engine types, 2017
                          • Figure 12: New units sold, by powertrain, 2009-17
                        • Tesla should lead industry electric vehicle sales to new highs in US
                          • Figure 13: Total US volume sales and fan chart forecast of battery electric vehicles, by units, 2012-22
                        • Plug-in hybrids expected to continue modest growth
                          • Figure 14: Total US volume sales and fan chart forecast of plug-in hybrid vehicles, by units, 2012-22
                        • Mild hybrids may bear brunt of middling sales and the allure of new EVs
                          • Figure 15: Total US volume sales and fan chart forecast of mild hybrid vehicles, by units, 2012-22
                        • Luxury brands have outsized presence in alternative energy vehicles
                          • Figure 16: Luxury brand market penetration as a percentage of total sales, by power train, 2017
                      • Market Perspective

                        • SUV and crossover sales continue to gain market share
                          • Figure 17: SUV and crossover market share of new vehicle sales, January 2018-March 2018
                      • Market Factors

                        • Gas prices play a significant factor in automotive decisions
                          • Figure 18: Alternative energy vehicle market share and average cost per gallon of gas, 2009-17
                        • Government incentives will continue to drive sales in the electric vehicle segment
                          • Government bans on ICE vehicles force manufacturers’ hands
                            • Increasing interest rates may cool new car sales
                              • Consumer confidence remains high, unemployment low boding well for AEV market
                                • Figure 19: Consumer confidence and unemployment, 2000-January 2018
                            • Key Players – What You Need to Know

                              • Tesla needs to deliver on Model 3s to stay ahead in electric vehicle segment
                                • Jaguar’s I-Pace set to challenge Tesla’s Model X
                                  • Japanese manufacturers stick with fuel cell vehicles
                                    • Volkswagen pivots from “Green Diesel” to electric vehicles
                                      • Toyota reigns supreme in mild hybrid segment
                                      • Company and Brand Sales of Hybrids and Electric Vehicles

                                        • Toyota stands alone in the mild hybrid segment
                                          • Figure 20: Mild hybrid units sold, by automotive manufacturer, 2017
                                          • Figure 21: Mild hybrid units sold, by automotive brand, 2017
                                        • Plug-in hybrids segment smaller but competitive
                                          • Figure 22: Plug-in hybrid units sold, by automotive manufacturer, 2017
                                          • Figure 23: Plug-in hybrid units sold, by automotive brand, 2017
                                        • Tesla leading off electric vehicle sales
                                          • Figure 24: Battery electric units sold, by manufacturer, 2017
                                          • Figure 25: Battery electric units sold, by brand, 2017
                                      • What’s Working?

                                        • Electric vehicle sales expected to grow in upcoming years
                                          • Toyota continues its dominance over mild hybrid segment
                                          • What’s Struggling?

                                            • Alternative energy vehicles stay below 5% of the total market
                                              • Fuel cell and natural gas vehicle sales virtually non-existent in US
                                              • What’s Next?

                                                • Jaguar takes aim at the Tesla Model X
                                                  • Volkswagen atones for “Diesel-Gate” with new electric vehicle models
                                                  • The Consumer – What You Need to Know

                                                    • Consumer purchase intent continues to trend downward
                                                      • Alternative energy vehicle ownership experience is limited among general public
                                                        • One in four current alternative energy vehicle owners live in California
                                                          • Car shoppers willing to consider hybrids or electric vehicles
                                                            • Cost remains the main barrier of entry for consumers
                                                            • Purchase Intent

                                                              • Purchase intent continues to trend down in a stagnant market
                                                                • Figure 26: Purchase intent, February 2018
                                                                • Figure 27: Purchase intent, July 2016-January 2018
                                                              • New home or family members in the home spur auto purchases
                                                                • Figure 28: Purchase intent, by major life events, February 2018
                                                              • Older Millennials show most immediate purchase intent
                                                                • Figure 29: Purchase intent, by generation, February 2018
                                                            • Hybrid and Electric Vehicle Ownership

                                                              • Ownership experience for hybrids and EVs is extremely limited
                                                                • Figure 30: Hybrid and electric vehicle ownership, February 2018
                                                              • Higher costs continue to limit exposure in the market
                                                                • Figure 31: Household income, by current and previous hybrid/EV owners, February 2018
                                                              • Millennials account for most hybrid and EV owners
                                                                • Figure 32: Generations, by HEV/EV ownership, February 2018
                                                              • Nearly one in four current EV/HEV owners lives in California
                                                                • Figure 33: Hybrid and electric vehicle ownership, by geographic area, February 2018
                                                            • Hybrid and Electric Vehicle Consideration

                                                              • Overall market is open to the idea of alternative energy vehicles
                                                                  • Figure 34: Hybrid and electric vehicle consideration, February 2018
                                                                • Millennials most likely to consider alternative energy vehicles
                                                                  • Figure 35: Hybrid and electric vehicle consideration, by generation, February 2018
                                                                • Previous experience with AEVs greatly increases consideration rates
                                                                  • Figure 36: Hybrid and electric vehicle consideration, by hybrid and electric vehicle ownership, February 2018
                                                                • CHAID analysis
                                                                  • Figure 37: Hybrid and electric vehicle purchase – CHAID – Tree output, February 2018
                                                              • Type of Alternative Energy Vehicle

                                                                • Mild hybrids draw the most interest among consumers
                                                                  • Figure 38: Type of alternative energy vehicle, February 2018
                                                                • iGens show least interest in mild hybrids, highest interest in EVs
                                                                  • Figure 39: Type of alternative energy vehicle, by generation, February 2018
                                                                • Significant overlap in interest between AEV types
                                                                    • Figure 40: Type of alternative energy vehicle, by type of alternative energy vehicle, February 2018
                                                                • Reasons for Considering a Hybrid or Electric Vehicle

                                                                  • Gas savings take top priority among those interested in AEVs
                                                                      • Figure 41: Reasons for considering HEV/EV, February 2018
                                                                    • Youngest and oldest shoppers most likely to buy a green car to help the environment
                                                                      • Figure 42: Reasons for considering HEV/EV – Concern about environment, by age, February 2018
                                                                      • Figure 43: Chevrolet Bolt, online display ad, June 2017
                                                                      • Figure 44: Chevrolet Bolt, online display ad, November 2017
                                                                    • Lower-income households less likely to cite government tax incentives as a purchase reason
                                                                      • Figure 45: Reasons for considering an HEV/EV, by household income, February 2018
                                                                      • Figure 46: Honda Clarity Plug-in Hybrid, acquisition email, February 2018
                                                                    • Younger generations like the style and image an AEV presents
                                                                      • Figure 47: Reasons for considering an HEV/EV, February 2018
                                                                    • Technology an appealing feature for Black and Hispanic consumers
                                                                      • Figure 48: Reasons for considering an HEV/EV, February 2018
                                                                      • Figure 49: Nissan Leaf promotional email, informational email, February 2018
                                                                  • Reasons for Not Considering a Hybrid or Electric Vehicle

                                                                    • Price is the main barrier to entry in the segment
                                                                        • Figure 50: Reasons for not considering HEV/EV, February 2018
                                                                    • Electric Vehicle Factors

                                                                      • Range anxiety top concern for consumers
                                                                          • Figure 51: Factors for buying an electric vehicle, February 2018
                                                                      • Vehicle Attributes

                                                                        • AEVs must improve their perceptions of affordability, safety, and reliability
                                                                            • Figure 52: Vehicle attributes, by vehicle types, part 1, February 2018
                                                                            • Figure 53: Vehicle attributes, by vehicle type, part 2, February 2018
                                                                          • Tesla improves luxurious perception of EVs
                                                                            • Figure 54: Correspondence analysis – Car type attributes, February 2018
                                                                            • Figure 55: Correspondence analysis – Car type attributes, December 2015
                                                                          • AEVs fall short in safety perception
                                                                              • Figure 56: Vehicle attributes, by gender, February 2018
                                                                          • Attitudes toward Hybrid and Electric Vehicles

                                                                            • Battery life span tops concern for consumers
                                                                              • Figure 57: Attitudes toward hybrids and electric vehicles, part 1, February 2018
                                                                            • Skepticism over resale values for hybrid vehicles
                                                                              • Figure 58: Attitudes toward hybrids and electric vehicles, part 2, February 2018
                                                                          • Cluster Analysis of Attitudes toward Hybrids and Electric Vehicles

                                                                              • Figure 59: Cluster analysis, February 2018
                                                                            • Cost Focused Shoppers
                                                                              • Characteristics
                                                                                • Figure 60: Vehicle attributes, by Cost Focus Shoppers, February 2018
                                                                                • Figure 61: Profile of Cost Focused Shoppers, February 2018
                                                                              • Opportunities
                                                                                • Image Focused Shoppers
                                                                                  • Characteristics
                                                                                    • Figure 62: Reasons for considering an HEV/EV, by cluster groups, February 2018
                                                                                    • Figure 63: Profile of Image Focused Shoppers, February 2018
                                                                                  • Opportunities
                                                                                    • Balanced Approach Shoppers
                                                                                      • Characteristics
                                                                                        • Figure 64: Profile of Balanced Approach Shoppers, February 2018
                                                                                      • Opportunities
                                                                                      • Appendix – Data Sources and Abbreviations

                                                                                        • Data sources
                                                                                          • Sales data
                                                                                            • Fan chart forecast
                                                                                              • Consumer survey data
                                                                                                • Consumer qualitative research
                                                                                                  • Direct marketing creative
                                                                                                    • Abbreviations and terms
                                                                                                      • Abbreviations
                                                                                                        • Terms
                                                                                                        • Appendix – The Market

                                                                                                            • Figure 65: Alternative energy vehicle sales, by model, 2017

                                                                                                        Hybrid and Electric Cars - US - April 2018

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