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J.D. Power and Associates: Interest in Hybrid Technology High, Especially Among Women

March 6, 2002

With 30 percent of new-vehicle buyersindicating that they would "definitely" consider a hybrid electric vehicleand another 30 percent indicating a strong consideration, hybrid vehicletechnology is getting a solid "green light" from consumers, especially amongwomen, according to the J.D. Power and Associates Hybrid Vehicle ConsumerAcceptance Study.

The study provides answers to three core industry questions abouthybrid vehicles: 1) In which vehicle segments do consumers want hybridsoffered; 2) What will cause them to purchase; and 3) How much are theywilling to pay?

Survey respondents indicate that they want a hybridpowertrain option in the same segment as their current vehicle. For example,a hybrid SUV is the most popular first choice vehicle segment for a hybridoption among current SUV owners, while a minivan hybrid is the first choiceamong minivan owners. However, regardless of the vehicle they currently own,nearly all consumers surveyed select a midsize car as their second mostpopular choice for a hybrid.

"A hybrid option in the high-volume midsize car segment wouldprovide manufacturers a broad-based growth path to the mainstream market,"said Thad Malesh, director of the alternative power technology practice atJ.D. Power and Associates. Concern over fuel prices, the high level of U.S. dependency onforeign fuel supplies, a federal tax incentive and concern for theenvironment are the primary motivators behind consumer consideration topurchase a hybrid vehicle, according to J.D. Power and Associates. The number one reason for considering a hybrid is concern over highfuel prices, and a detailed analysis of fuel prices indicates that asexpected, consumer interest in hybrid vehicles increases as gasoline pricesrise, according the company. Though price and costs play a critical role in the acceptance ofhybrid vehicle technology, the study shows there is a greater willingness topay for hybrid vehicles than previously believed. Consumers expect to paymore for a hybrid than they would for a traditional gasoline-engine vehicle.Some consumers, such as small car owners, are willing to pay more than otherbuyers. Of those who would consider a hybrid electric vehicle, nearlyone-third indicate they would still buy one even if the savings from reducedfuel costs during their ownership period would be less than the extra costof purchasing the hybrid option. Consumers also indicate that their appetite for hybrids wouldincrease if the federal government helped offset some of the additionalcosts. Consumers not only see a federal tax credit as important to theirdecision to purchase a hybrid, they also expect the credit to be nearlyequal to the additional cost for the hybrid option over that of thegasoline-engine version. While women tend to be substantially more interested in hybrids thanmen, the lack of available information and education is the main barrier forpurchasing one, according to female respondents. "Women are definitely interested in hybrid vehicles but aredeferring their decision to purchase because they don't know enough aboutthem," Malesh said. "Manufacturers should be working to better educateconsumers on hybrid technology, especially among women." On the other hand, male new-vehicle buyers surveyed also indicate astrong interest in hybrids but are concerned that these vehicles will lackstrong performance. "The lack of consumer understanding underscores the challengesautomakers face in gaining acceptance of hybrid technology," Malesh said."Many people still think hybrid vehicles are the small, expensive,limited-range electric vehicles that they saw or heard about in the 1990s.Approximately two years after the launch of the first hybrids in the UnitedStates, nearly one-half of the survey respondents still incorrectly believea hybrid vehicle needs to be plugged in to recharge the battery pack." In comparing consumer expectations of hybrid vehicle acceleration,fuel economy and emission levels with those of a gasoline-powered vehicle,respondents clearly show a need for more information about hybrids.Respondent comfort levels with various hybrid vehicle operatingfeatures-such as idle-off at a stoplight, higher voltage batteries andconsumer expectations regarding the length of the battery packwarranty-highlight additional educational requirements. Overall, the introduction of two gasoline-electric hybrid modelsinto the U.S. market has increased awareness of hybrid technology. The HondaInsight and Toyota Prius, as well as other announced hybrids such as theFord Escape, have fueled this awareness of hybrid technology to more than 80percent of new-vehicle buyers surveyed. These first-in-market introductionshave given Honda and Toyota the clear lead among new-vehicle buyers as themost technologically advanced manufacturers in the development ofenvironmentally friendly vehicles. The results of this consumer-based study support the sales outlookoutlined in a separate J.D. Power and Associates hybrid vehicle forecast, inwhich hybrid sales are expected to increase dramatically in the next fewyears and approach 500,000 vehicles per year shortly after mid-decade. "We expect to see as many as 20 hybrid vehicle models, includingcars, trucks and SUVs, at dealerships and on the road in the next four tofive years," Malesh said. The Hybrid Vehicle Consumer Acceptance Study is based on responsesfrom more than 5,200 recent new-vehicle buyers. Headquartered in Agoura Hills, Calif., J.D. Power and Associates isa global marketing information services firm operating in key businesssectors including market research, forecasting, consulting, training andcustomer satisfaction. J.D. Powerand Associates can be accessed through the Internet at www.jdpa.com.

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