Bright Hybrid Market Future

The Hybrid market is looking good according to this research from a research entitled: “Hybrid Cars  Market”  from Companies and Markets.  According to this news post, in 2006, hybrid vehicles had a limited presence due to high cost.

The gist, the U.S. remains the largest market for hybrids at 70% of sales in 2005 due to climbing oil prices.  It seems an increased environmental awareness also played a role.  Obviously the adoption of hybrids provide market share opportunities for manufacturers, such as Toyota & Honda who have already taken the lead.

The trick, lowering the initial high cost of purchasing a hybrid will be key.  Their market share “could be limited to half or less than half of all light-duty vehicles even in the long-run, unless policy and market conditions change significantly in its favor.”  We found this to be particularly true, as most manufacturers struggle to lower costs and bring out hybrids to mass adoption.

Experian Automotive reported in this article that 47% of hybrid users are more loyal to their Eco-friendly brand of vehicle than the 35% of traditional gas engine users to their brand, which works in hybrid manufacturers favor.  With numbers such 130% more hybrid vehicles sold the last three years, it is serious motivation for Detroit to be successful in this area.

So what is Detroit doing? Unfortunately, it seems the U.S. is falling behind on battery technology and could leave others to contend this new market.  According to Ann Wright, CEO of Johnson Controls-Saft: “More than half of the lithium needed for the batteries comes from South America… In a decade, about 40% of the lithium will come from China.”

Johnson Controls-Saft hopes to change this with the announcement of a two-year contract from an advanced battery consortium to develop lithium-ion battery systems for plug-in hybrid vehicles.

Again, the sooner we commit funds to research, the quickler we will be able to meed to adoption of battery technology and better poised to affront this new market.