Hybrids were the future of ‘green’ cars. What happened?

Source: David Iaconangelo, E&E News reporter • Posted: Thursday, June 28, 2018

A “rising consensus,” as Bloomberg New Energy Finance heralded in February, sees electric vehicles emerging as a major force in the global auto market over the next two decades.

The new cars will be propelled by cheaper batteries and regulatory edict, according to projections, creating a powerful alternative orbit to the gas-guzzlers that have long dominated the U.S. auto industry.

But if broad global EV adoption by midcentury is the emerging conventional wisdom, the flip side for some technology and energy analysts is something closer to ambivalence.

Energy historian Vaclav Smil, for example, cited a fistful of overly optimistic forecasts from the past decade in a 2017 article in the publication IEEE Spectrum that decried a “triumph of hope over experience” when assessing markets for new auto technology.

An informal survey of decade-old reports by auto industry analysts suggests that while some forecasters overshot the mark on electric vehicles, scenarios for hybrid-electric adoption often proved even more illusory.

One frequently cited 2009 report from the Boston Consulting Group said that in 2020, fully electric vehicles would account for 1 to 5 percent of new car sales in North America, a scenario that could turn out to be true.

But the same report envisioned an 18 to 32 percent share of new car sales for hybrids in 2020, a category that encompassed plug-ins and other gasoline-dependent electric models. In May, according to hybridcars.com, a little more than 2 percent of new car sales were hybrids, down from a 3.2 percent peak in 2013.

Boston Consulting wasn’t alone. In 2009, the Paris-based International Energy Agency, which represents oil-consuming countries, also wrote that global hybrid sales could hit 2.2 million by 2012, a projection that landed several hundred thousand cars short. A year later, consultant PRTM’s e-Mobility director, Oliver Hazimeh, told the magazine Wired that by 2020, plug-ins and other hybrids could be as much as 25 percent of the global car market.

Lessons learned

A decade later, few analysts have paused to revisit, at least in print, why hybrids didn’t sell as expected.

John German, a senior fellow at the International Council on Clean Transportation, said automakers hadn’t developed hybrid systems cheap enough to convince mainstream consumers. “It’s simple: Hybrids are too expensive,” he said. “They’ve always been too expensive.”

The federal government’s adoption of emissions standards in 2009 that used a car’s “footprint” — the size — rather than its weight forced manufacturers to come up with innovative powertrains. That would begin to pay off for hybrid sales in the next few years, particularly as they incorporated cheaper, more power-dense batteries. But it also encouraged automakers to make more efficient compact gasoline-burning cars.

Several analysts pointed to technological advances in conventional vehicles. Over the course of the decade, they said, the auto industry pursued more efficient engines as a way to fulfill emissions mandates, rather than pushing milder hybrids.

“There are now other technologies, including [internal combustion engines], which have improved to the point they now perform as well as hybrids in emissions tests,” said Dave Clegern, spokesman for the California Air Resources Board.

Near the turn of the decade, the Toyota Prius was gaining sales momentum, and other manufacturers were debuting their own hybrid models, said Buddy Lo, automotive analyst at market research firm Mintel.

“I think that drove the very optimistic outlooks for hybrid sales,” he said.

Then came the economic recession, which flattened demand across the auto sector.

“The auto industry was hit hard by the Great Recession, and hybrid vehicles particularly,” said Lo.

A slow recovery, combined with lower gasoline prices, dampened the market for hybrid-electric cars, while green-minded drivers who were willing to pay a premium were lured by Silicon Valley’s EV darling Tesla Inc. and the promise of purer electrics.

Margins of error

Early forecasts that put hybrids on the glide path to record-breaking sales might also raise questions about auto industry modeling.

Michael Kintner-Meyer, a scientist at the Pacific Northwest National Laboratory, said the lab had surveyed auto, battery and charger-infrastructure experts to inform a 2008 outlook. That paper’s projections were among the more cautious, putting plug-in hybrid adoption rates at between 2.2 percent and 7.5 percent of the auto market by 2017.

“We didn’t do econometric modeling,” said Kintner-Meyer.

Experts from industries that would profit from the adoption of a new technology tended to be more optimistic, he said.

“You have a positive outlook because that’s where your heart is, your investment’s in it, and that’s where you’re spending your energy,” he said.

But he and others bristled at the implication that a definitive verdict had been rendered.

Plug-ins and pure electrics were growing faster than other hybrids were when first introduced, noted Kintner-Meyer.

“If you look at the actual growth numbers, they’re fairly robust,” he said. “In the long run, does it really matter if we’re off by three or four years?”