The changing technical and regulatory landscape will force many changes on both automakers and consumers. How those changes are implemented and accepted will depend as much on the skill of the people developing the technology as it does on the ability of consumers to understand and pay for it. Despite the claims made for diesels and hybrids-both plug-in and conventional-and the ability of new regulations to reduce oil use, it is increasingly apparent that not only are car buyers are unfamiliar with what to expect from these new technologies, legislators do not understand the most efficient way to reach their stated goal of reduced fuel use.
Hybrid and Plug-in Hybrid Vehicles
Plug-in Hybrid Electric Vehicles (PHEVs) will require owners to find a 110-volt outlet into which they can plug their vehicle to recharge the battery. Otherwise, they may find themselves driving predominantly on electrical power provided by the internal combustion generator set. This would eliminate the PHEVs mileage advantage-numbers as high as 100 mpg have been mooted for Chevy's Volt, for example-and feed consumer discontent, especially for those who exceed the advertised 40 miles/charge/day electric driving range. According to Ken Kurani, associate researcher, Institute of Transportation Studies, University of California, Davis: "In our survey, we found that 52% of consumers have a 110-volt outlet within 25 feet of where they park their car at night, less than 10% have access to one at work, and less than 20% found one near where they park when on errands, etc." These numbers suggest most PHEV users won't charge the vehicle other than when it's parked overnight.
Also, Kurani's survey attached a value to any improvements made over a base PHEV design, and showed that respondents aren't willing to pay for the performance levels most OEMs are pursuing. "Our respondents," he says, "wanted a blended-mode vehicle with a short charge-depletion [electric drive] range and better fuel economy than the vehicle they drive today." They aren't willing to pay the price for an abundant all-electric drive capability they don't expect to use, especially if there isn't a similarly abundant increase in overall fuel economy. Conversely, says Michael Omotoso, senior manager, Global Powertrain Forecasting, J.D. Power and Associates, "Our survey showed unrealistic consumer expectations. They expect greater electric-only driving range and shorter recharging time than currently is feasible." One major reason for this difference may be that, unlike Kurani's study, respondents had an incentive to ask for more capability than they could afford because no penalty was associated with it. Though 90% of those surveyed said they would consider a hybrid because of its better fuel economy and lower overall fuel cost, 22% were concerned about the price differential versus a gasoline-powered car, 13% expected higher maintenance costs, and 11% questioned the battery life. PHEV intenders also questioned whether it would have sufficient driving range (42%), adequate battery life (34%), and the support of a robust plug-in infrastructure (30%).
Lesson: Selling a PHEV on its ability to travel a certain number of miles on electricity alone may not have any meaning to buyers who consistently drive long distances on the internal combustion engine. Also, battery life and driving range are real concerns as consumers come to grips with the change from high energy/quick refill fuels like gasoline to battery packs.
The future for diesel powertrains is not getting any brighter as there has been a distinct erosion in support, with the number of potential buyers dropping from 23% to 16% in the latest J.D. Power survey. Nevertheless, the U.S. diesel market-if heavy-duty pickups and SUVs are included-will be larger than the hybrid market in terms of volume, signifying that most people continue to view the diesel as a truck, not a car, engine. Nearly half-49%-of respondents cited high fuel prices as the main reason they would not choose a diesel. Fully 43% have no idea what a "clean diesel" is, and many associate the technology with heavy-duty over-the-road trucks, cold-start problems, grime, and an unpleasant smell. These prejudices are reinforced by the limited number of new clean diesel engines currently on the market, and the lack of knowledge of the technology's long history in the European car market. Lesson: Though their introduction in luxury makes (Audi, BMW, Mercedes) may help lessen the diesel's truck-only image, the price premium for a gallon of diesel must fall below 30%-the mileage advantage of a diesel-before consumers view it as an economical alternative to gasoline. Automakers should promote the range and CO2 advantage diesel-powered vehicles have, each of which is price independent.
According to John German, manager, Environment and Energy Analysis, American Honda Motor Co., "Drivers want to know how far they can go on a gallon of fuel, but-for the purpose of determining efficiency-we should be looking at how many gallons of fuel are used to travel a set distance, like 100 miles." The reason, he says, is that the former measure is non-linear, and places an overemphasis on increases in miles traveled. The measure of fuel used over a set distance, on the other hand, is linear and looks at overall efficiency. For example, increasing mpg from 20 to 21 saves four times as much fuel as increasing it from 40 to 41 mpg, even though the incremental change-one mpg-is the same in each instance. Says German, "Focusing on the number of miles per gallon, regulations in effect subsidize one technology over another rather than pinpoint the most efficient method available for the price." Lesson: Given the industry's vested interest in the outcome, it is paramount that it undertake a grass roots educational effort aimed at enlightening both regulators and consumers about how to best measure true fuel efficiency. This includes setting reasonable performance standards that don't conflict with other priorities (i.e. safety versus fuel economy).