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