The Risks of Using Hybrid Sales to Forecast Growth of Electric Cars

By · October 14, 2013

History of Hybrid Car Forecasts

This graph was originally created in 2006. Today, I added the red dots to show where hybrid sales actually landed.

Proponents of electric cars often argue that the EV market is doing well because sales numbers are higher than for hybrid gas-electric cars in its first few years. In other words, the total number of sales for the dozen or so plug-in cars from 2010 to 2013 are higher than for the Toyota Prius, Honda Insight, and Honda Civic Hybrid from 1999 to 2002.

In 2006, I created the graph on this page. At that time, I plotted every available forecast, and drew a black line to show the middle range between the most optimistic and most pessimistic forecasts for hybrids. I remember being peeved at the corporate forecasters for selling hybrids so short. Today, I added the little red dots to show actual sales (with the 2013 number extrapolated from nine months of sales).

It’s sobering to consider that the real numbers are way at the bottom, and to see how wildly optimistic some forecasts were—from folks like Oak Ridge National Lab and Booze Allen. (Congrats to Dr. McManus for his prescience, or maybe dumb luck.) But given these numbers, does it achieve anything to peg EV sales to hybrid sales?

Yes, it’s helpful to use some kind of benchmark for EV sales. And yes, only 35,000 hybrids sold in the U.S. in 2002, compared to the 90,000 or so plug-in car sales expected by the end of 2013. That’s awesome. EVs and plug-in hybrids, despite media reports that would argue otherwise, are off to a good start. But does that mean that EVs will continue forever to track at nearly three times the number of sales of hybrids—at the relative same age of the market? That’s very hard to predict, given the differences in technology and other market factors.

In the first three years for hybrids, there were really only two cars: the drab first-gen Prius and the original Honda Insight, a funky teardrop two-seater with very limited market appeal. Also, the marketing budget and buzz for those cars was next to nil—compared to the endless press coverage for the Chevy Volt, Nissan LEAF, and Tesla, years before the cars were on the market. The first hybrids were introduced before green was in, when big SUVs still dominated U.S. roads.

The hockey-stick growth of hybrids only happened when Toyota introduced the 2004 Prius, a much more accessible family-size liftback, just as gas prices hit an upward inflection point. We don’t yet know if EVs will benefit from the same economic factors, or the introduction of a car similarly in a mass-market sweet spot. Although we can hope.

Polishing the Crystal Ball

Then again, the global economy went into a tailspin in 2008—taking all auto sales, including hybrids, down along with it. The overall auto market, and hybrids, have taken five years to recover, and are only now back in line with 2007 levels. Maybe the growth rate is set to resume. Yet, what we know is that hybrids as a percentage of overall sales remain stuck at about 4 percent of the market. And it must be said that hybrids have the same range and quick fueling times of gas-powered cars—a challenge for EVs (although not plug-in hybrids).

I suppose forecasts can undersell the market potential for EVs, just easily as they overestimated where hybrid gas-electrics like the Prius would be in 2013. Maybe we’ll hit a million EV sales a year much faster than expected.

But my conclusion about hybrid and EV forecasts today are pretty much the same as when I created that graph seven years ago. Expect growth, but exactly how much? Your guess is as good as mine.


· · 4 years ago

Good data. I think this will dampen the unfounded joy among EV supporters a bit.

Hybrid sales are ranging between 3% to 5% of total sales. So, plugins will be lucky to reach that amount in the next 5-10 years.

On the other hand, most hybrids are concentrated between Toyota, Honda and Ford. The rest of the automakers are slow to embrace it. Also, the $ saving between hybrid and conventional high mpg gas cars are small yet the price tag is often 10% of the total vehicle price.

But plugin cars can stretch that savings signficantly. $1,000-$2,000 per year in gas saving is totally possible with a plugin car. Yet the initial cost is only $5k-$8K after federal tax incentivs. So, that amount is easily recouped after only few years.

So, in this case, I can see plugin cars sales pass hybrid sales in the long run. But we have to have enough choices in order for that to happen. GM and Nissan are the only two leading maker for the plugins (Tesla is a much smaller company in terms of volume). Ford and Toyota are distance 3rd and 4th. Until we have at least 30-50 models available for consumers, the sales will remain below the hybrids.

· · 4 years ago

It would be interesting to see the "number of hybrid models" offered for sale in each year. It seemed many manufactures canceled delayed model introductions between 2008 and 2012?

· · 4 years ago

Brad, Can you post the link to the original story from 7 years ago. I could probably find it but I am too lazy to go back that far.

· · 4 years ago

It is extremely hard to predict the future sales because it mostly depends on the price of oil and the price of batteries. Everything else is a minor detail.

· · 4 years ago

I really enjoyed the article, but I wonder if there was anything else that was going on at the time your 3rd (and later) red dots were applied? Oh yes, that pesky recession that threw the entire planet on its ear! Brad, is it really fair to suggest everything that was forecasted prior to mid-2007 was too optimistic because it didn't happen? I think if the world economy had kept going the way it was going before mid-2007, the forecasts would have been much closer to what actually happened. What do you think?

· · 4 years ago

Hey Stuart - I agree with you. There's nothing like a global economic meltdown, the worst in a generation or two, to change the adoption pattern. In one sense, that shows how unpredictable things (events you never expected) can mess up forecasts. On the other hand, the auto market is back to where it was before the meltdown, and hybrids are nowhere near where forecasters thought they would be. In the meanwhile, during the past few hours, gas prices stabilized (still high but consumers are used to it by now) and ALL cars get more fuel efficient. That all took the edge of hybrid growth. I'm not faulting the forecasters for not being clairvoyant. But life almost never happens the way you pictured it. Deep, right?

· · 4 years ago

I see a totally different trajectory for EV sales that is not related to hybrids. These technologies, in their current form, are too different. And the key is not the technology it is the motivation of the car manufacturers. If this was the case we would see a substantial growth in the miles per gallon that hybrids promise. Currently a non-hybrid 1996 Geo Metro gets better gas mileage than any of these so-called hybrids. Automakers are just marketing hybrids as a way to adopt a "Green Badge" while not delivering substantial improvements.

EVs present a severe threat to the current auto industry's business model. Most people think these companies sell cars to make money, but that is only a portion of their revenue stream. They make much more on parts and service. EVs disrupt that model because there are no repairs or standard maintenance. They are too simple and currently will last too long to integrate painlessly into the automaker's business model. So, automakers will resist changing their business model. And frankly, so would I. That is business.

This whole discussion will get interesting only when, and if, Elon makes good on his projection to build and sell a 200 mile range EV for around $35k. Should this occur, it will change everything and effectively place an end-mark in the near future for gas and diesel transportation. Ok, so in this case, near the future would be within 10 years after this miracle car shows up.

Am I crazy? Of course, but that's not related to this discussion. Consider this fact; fleet vehicle sales are far less fashion driven. Also, take a look at the announced order sheet for BYD's EVs. These are all fleet and bus sales. The most recent I have seen is the 1500 taxi order by the Taiwanese. They are also selling the heck out of their all-electric drive buses. Both the BYD bus and their "Taxi" model get over 150 miles of range. The fleet owners look at cost of ownership - fuel plus maintenance puts EVs far ahead.

We all like to think we are making practical choices, but fleet owners make it their business to do so. While there may be some great environmental or geopolitical ramifications for moving away from fossil fuels, the real reason people will move quickly to EVs is the lower cost of ownership. The difference between the future and now lies in the spread of the anecdotal EV experience. Once your neighbor, or friend, or relative buys an EV you will finally have a chance to ask a real person about how an EV could possibly make sense. They do.

· · 4 years ago

"Currently a non-hybrid 1996 Geo Metro gets better gas mileage than any of these so-called hybrids. Automakers are just marketing hybrids as a way to adopt a "Green Badge" while not delivering substantial improvements"

I call that the biggest and very popular misunderstanding of the general public.

Those Geo Metro or Honda CRX will NEVER pass today's tough safety requirement. They are NOTHING more than a death machine today. Even the small compact Smart will crush both GEO Metro and Honda CRX today.

Today's hybrids are FAR more comfortable, reliable and safer than those old high mpg "tin box"....

· · 4 years ago

Well said, Sparkinator. While we will witness mechanically simpler EVs putting a dent in the profits of OEM parts supply networks in regards to things like oil filters and fan belts, the disturbing trend I can predict is that the cars will become electronically more complex. Witness the current generation Toyota RAV4 EV, which can't be charged on the last day of the month on those months that contain 31 days.

And, MMF . . .

". . . the biggest and very popular misunderstanding of the general public"?

No, really? . . . the biggest?!? For someone so obsessed with exact details and so willing to verbally flog others for similar infractions, this is a rather cavalier statement coming from you. I'd like to see some sort of documentation on this "biggest" statistic. What percentage of the population believes this? What are your sources?

· · 4 years ago

I think EV acceptance will take substantially longer than with hybrids, unless gasoline costs significantly spike upwards. Hybrids were far more closely related to and therefore less of a risky jump to make than EVs are. And hybrids did not require owners to modify their driving habits as demanded by the range and recharging issues of EVs.

· · 4 years ago

@Benjamin Nead,

Time after time, people complain about the so called 80s CRX. If Honda could have done it with a 80s CRX and 50mpg, why does it take 20 years to barely get 40mpg in its hybrid lineup...

That is the biggest complain to Honda's intitial hybrid launch.

General public sentiment about MPG is pretty stupid. But most of the EV community are smarter than that. Occasionally, you get few of those posts here...

· · 4 years ago

@Benjamin Nead,

"For someone so obsessed with exact details and so willing to verbally flog others for similar infractions, this is a rather cavalier statement coming from you. I'd like to see some sort of documentation on this "biggest" statistic. What percentage of the population believes this? What are your sources?"

I flog you for your ignorance on cars in general since you can't even find a radio volume in your face or see the clear sticker diagram under the hood of a car. Those are automotive details.

If you want to get personal, we can. I will be happy to "flog you" every chance I get with every obvious mistake you post on the particular details of automobile technology that you don't understand....

The biggest statistic comes from my reading on various MPG related forum on hybrid cars. If you think that is NOT sufficient, then please do the work to disapprove me otherwise.

The only other MPG related misunderstanding are MPG, MPGe or PHEV related MPG issue and EPA MPG vs. real world MPG.

· · 4 years ago

I agree with Sparkinator that hybrid uptake history is useless as a predictor of EV sales, though perhaps for different reasons. I would take a slight exception to the characterization of the "manufacturers" being dependent on a parts & service business model. That's really the dealers' game, and while I realize they are the manufacturers' distribution partners, it's no secret that there are significant conflicting interests between the two sides. Hypothetically, manufacturers could successfully transition to an EV-dominated world if that were to come about - but as the evolving saga of Tesla vs. NADA suggests, that may well not be the case for automobile dealers.

But to the main point, as Brad acknowledges, EVs face unique challenges in public acceptance, while hybrids are only incrementally different from ICEVs. A non-plugin hybrid is just an ICEV with a dynamic energy management and recovery system. All of its energy comes from burning fossil fuel in its ICE, and making sure it has enough energy onboard to handle the day's itinerary requires no special considerations beyond, well, putting gas in the tank, just like an ICEV.

For that reason, market uptake of early hybrids was impacted by little beyond value considerations, e.g., did they provide enough fuel savings to justify the upfront costs? How much would they cost to maintain and/or repair? Given its radical configuration, the Insight raised the additional question of how little car one could live with, but there was never any question as to whether a Prius or Insight could be one's only car. The Prius took off when Toyota delivered a somewhat larger, more useful car at a comparable price with even better fuel economy - in short, an improved proposition in every way. Nobody's yet to match it, unfortunately (the C-Max looked promising, but wound up being less fuel efficient in the real world than EPA testing suggested).

BEVs face a much greater challenge in that many buyers have serious doubts the cars can meet their needs. Range anxiety may not be a regular fact of life for EV owners, but it very definitely influences the thinking of potential EV buyers.

The PHEV business is another animal altogether. Given the need to haul around two complete powertrains and energy supplies, it probably shouldn't be too surprising that we've seen models offering either limited EV range (the Prius PI) or suboptimal passenger/cargo capacities (the Volt and Ford Energi models). Mitsubishi's JDM success with its Outlander PHEV shows that there's a market for a true "do-it-all" PHEV at an accessible price point. Given the obvious packaging advantages of the popular CUV configuration (the O-PHEV sacrifices its third row seating and little else) the question that remains is why other manufacturers haven't reasoned their way to a similar solution, e.g., why didn't GM follow through on the MPV5?

· · 4 years ago

MMF . . .

It's possible to have a conversation - and even advance a contrary viewpoint here - with belittling or "flaming" whoever it is you're talking to (and it's not just me.) I suggest you learn how, as it could help you in social situations beyond this place. Then again, I'm not holding my breath waiting for it to happen.

To bring this back on topic . . . yes, a modern hybrid that weighs 3200 pounds is going to be more luxurious but will get comparable (or worse) mileage than a 1700 pound ICE car from 20 years ago . . . and any car from today is going to be more survivable in a crash than just about any from 2 decades hence.

The larger point that Sparinator was making (if I'm interpreting him correctly) was that it's not exactly progress if the overall mileage of today's cars haven't improved all that much from ones made in the mid 1990s.

· · 4 years ago

Others have outlined a host of reasons why EV's face a more difficult battle than hybrids did 10 years ago. I would like to offer a few reasons why (once people get educated about EVs), they might actually have a steeper acceptance curve.

Convenience. Most new drivers cannot understand how outright convenient EVs are. In an EV, one starts the day - every day - with a full "tank" of fuel. I never have to go out of my way to stand out in the snow and freezing wind, smelling others' exhaust, just to get fuel. I simply go home at the end of the day and plug in. It's no harder than plugging in my cell phone.

Operational Cost. We all know this one, and non-EV drivers can also appreciate it. Electricity is cheaper than gas. Plus, EVs don't need oil changes, belts, are easier on their brakes, etc. However, what most people still don't know is that numerous studies have shown the total cost of ownership for an EV to be less than for a comparable gas car.

Driving experience. For many people, a car is simply a means to get from A to B. But for many others, it is just as much about the journey as the destination. A gasoline engine cannot match the responsiveness of an electric motor. When you press the accelerator the car just goes, instantly and smoothly. An EV is supremely quiet. Some will miss the roar of a big block engine. I suspect many more will not.

National Security. Most people realize that the United States is hemorrhaging money overseas. We have a huge trade deficit, and oil is a major part of that. We cannot go on forever like this. EVs cut out the need for foreign oil, and use domestically produced energy. Even those who call EVs "coal cars" have to admit that coal is a domestic fuel source.

Environment. I put this one last because I don't believe this is really what sells cars. Most people care to some degree about the environment (we all need to breathe, after all), but few actually make purchases based off it. That said, it has been proven time and again that EVs are cleaner than gasoline cars. Plus, EVs get cleaner every year (with more renewables/natural gas and fewer coal plants) while gas gets dirtier every year (with fewer traditional oil fields, and more things like the tar sands/deep sea drilling).

· · 4 years ago


I agree with what you said. You have some very valid points. I think PHEV is the natural step b/c of the issues that you listed. With technology improvement in battery, the impact of interior space of the PHEV should be smaller. Personally, I think the "perceived range anxiety" is a far bigger issue than limited interior space. That is why I think PHEV would offer a better bridge than the limited range BEV in the short term.

Like you said, even the non-plugin hybrids are barely offering what buyers need and Prius is doing well b/c it offers the biggest saving without sacrifice too much. Even though, its sales aren't exactly topping some of the most popular midsize sedan in the market.

I believe most people buy with $$$ in mind. Plugin cars in general require a long payback (5-7 years). People are short sighted on average. That is the issue. Solar panels are way cheaper in the long run and require almost NOTHING upfront in some of the new plans. But we don't see solar panels everywhere. They are barely covering the 5% of the houses in my subdivision. The breakeven payback is only 6 years for me. But people still complain about the cost and when in fact the electricity cost is going up every year. Same with more efficient appliance. Plugin cars are no different.

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