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Consumer confidence in hybrids unshaken by price, safety issues

Monday, August 1, 2005 - 00:00

Hybrid vehicle registrations are steadily rising, despite concerns of cost-effectiveness and safety.

But the number of hybrids on the road will likely not come close to the more optimistic projections circulating throughout the industry, and competing technologies could also enter the fuel-efficiency game.

There were 53,076 total hybrid vehicle registrations nationwide from January through April this year, according to research firm R. L. Polk & Co.

With that in mind, hybrid registrations in 2005 stand to exceed the 83,153 reported in 2004, a figure also provided by the research group, which says the market for hybrid gas-electric vehicles has grown more than 960 percent since their introduction in 2000 — an 81-percent increase was experienced last year alone.

Some companies, like Toyota, expect 1 million hybrid registrations within the next decade. Others anticipate 500,000 to 1 million registrations by the end of this year, which some argue is highly unlikely. Yet another contingent expects 2005 registrations to double over last year’s numbers, which, again, may be dubious.

J.D. Power and Associates, which optimistically pegs the number at 220,000 hybrids this year, or 1.3 percent of the total market, foresees 650,000 hybrids sold by 2012, or 3.5 percent of the total market.

Driving with a clear conscience

Hybrids are certainly beneficial for the environment, with some models boasting up to 60 miles per gallon, but their true financial cost has been at the center of some recent reports.

Hybrid models are known to cost $3,500 to $6,000 more than their gas engine counterparts, and to recoup that extra cost — even with the savings in gas — would take more than a decade for most drivers, according to online financial group bankrate.com; but by that point, the vehicle will most likely require a new battery, which is said to cost between $1,000 and $2,000 to replace. (Honda and Toyota reportedly offer eight-year warranties on new hybrid batteries.)

For hybrid owners to break even with fuel-only vehicles, gas prices would have to range from $5 to $10 a gallon, according to the Specialty Equipment Market Association (SEMA), citing research from Edmunds.com, which publishes vehicle pricing, reviews and ratings.

State and federal tax deductions are also available to hybrid vehicle buyers, but the federal breaks are set to dwindle and eventually end over the next couple of years.

It’s obvious that cost is almost always a factor for consumers, but apparently not enough to fully offset hybrid vehicles’ environmental significance.

J.D. Power and Associates says consumers are unfazed by these extra costs associated with owning a hybrid, and as more hybrid models become available, the number of hybrid owners is bound to grow exponentially.

“Based on our research, the No. 1 hurdle that vehicle manufacturers are faced with, as it relates to hybrids, is the price premium,” admits Anthony Pratt, senior manager of global powertrain forecasting at J.D. Power-LMC Automotive Forecasting Services.

But, he adds, money is usually not the primary concern among hybrid car owners: it’s the environmental savings one reaps. “A larger group understands they’re not going to break even, but they’re willing to drive a (hybrid). They can drive their cars with a clear conscience.”

Competing gas-engine technologies are also rising up against hybrids, says Pratt. One is cylinder deactivation, in which the engine deactivates some of its cylinders at certain times to conserve fuel. 

He says other competing technologies include diesel, as well as constant variable transmissions (CVT). A CVT, also known as a continuously variable transmission, is a revamp of old technology that uses adjustable pulleys within the transmission to increase or decrease space based upon driving demands.

Safety also a factor

Many hybrid drivers are likely unaware of the true voltage harbored within their vehicles.

And with that, rescue workers are trying to get up to speed on hybrid knowledge when extricating motorists from  accidents. Electrical lines in hybrid vehicles carry from 144 to 650 volts, according to State Farm, which held a program recently to educate first responders dealing with hybrids.

With demonstrations of how to identify hybrids, power them down and cut into the vehicles’ bodies, the State Farm program has so far reached more than 2,500 emergency workers nationwide, reports sister publication Automotive Body Repair News.

Hybrids board the bus

Hybrid vehicles are also emerging in mass transit systems throughout the country.

California’s Long Beach Transit recently announced that it would implement 47 gasoline-electric buses into its fleet this year, with an option to order 20 more a year for the next four years.

Called E-Power buses, the 40-foot vehicles have technology similar to the Toyota Prius. Other Southern California transit agencies are expected to follow suit and are awaiting their vehicle orders.

Though they cost $550,000 per bus, the E-Power vehicles will cost less to maintain, operate and fuel, according to the transit agency.

A number of cities have already incorporated diesel-electric hybrids into their fleets that use technology from GM’s subsidiary Allison Transmission. 

Earlier this year, Remy International announced they were working with GM to manufacture drivetrain systems for the diesel-electric buses, which Remy says will be a significant part of their future business.

Seattle, one of the more than 20 U.S. cities using diesel-electric hybrid buses, converted more than 200 of its 1,300-bus fleet to these hybrids, which are said to cut fuel consumption by 25 to 50 percent and exhaust emissions by 90 percent.

These buses also deliver 50 percent better acceleration than conventional diesel buses, according to GM.

It’s inevitable that hybrids represent some portion of the automotive industry’s future, but just how much is yet to be determined.

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