“Gen Y's strong affinity for hybrid vehicles could make it the generation that leads us away from traditional gasoline-powered vehicles.” –Craig Giffi, vice chairman and automotive practice leader at global consulting firm Deloitte LLP
Could the ongoing shift between generations help foster greater acceptance – and thus wider acquisition – of hybrid vehicles? That seems to be one of the conclusions from a recent survey conducted by global consulting firm Deloitte LLP.
Craig Giffi, vice chairman and automotive practice leader at Deloitte, noted that the firm’s annual survey of Gen Y consumers (now in its fourth year) found that a strong majority (59%) of Gen Y respondents prefer an “electrified vehicle” over any other type of car or truck.
Moreover, Gen Y consumers heavily favor hybrid gasoline-electric vehicles (57%) over pure battery electric vehicles (2%) or vehicles with a traditional gasoline-only powertrain (37%).
[Speaking of hybrids, check out this one-of-a-kind hybrid built by Sweden’s Volvo Trucks.]
Giffi said Deloitte polled 1,500 Gen Y, Gen X, and “Baby Boom” consumers in the U.S., as well as 250 Gen Y consumers in China and 300 Gen Y consumers in Western Europe from September to October last year – in the process defining “Gen Y” consumers as those ranging in age from 19 to 31.
According to Giffi, Gen Y consumers may be what he calls “the game changers” in terms of hybrid vehicle demand in the U.S. because, at nearly 80 million strong, they are one of the biggest domestic automobile buying market segments and the largest consumer segment since the “Baby Boom” generation.
Giffi (seen at left) also indicated that, according to projections, one out of four new automobiles sold this year in the U.S., and 40% of vehicles sold in the next 10 years, should be bought by a Gen Y consumer.
From the study, Deloitte found that Gen Y consumers are drawn to hybrids for several reasons but most notably fuel efficiency. Extrapolated from the survey data, some 89% of Gen Y consumers are considering buying a vehicle that gets better mileage, especially true when gasoline prices rise above $2.75 per gallon – the median price Gen Y consumers see as “fair,” according to Deloitte’s poll.
[FYI, the average U.S. price is now $3.391 per gallon, according to the most recent Energy Information Administration (EIA) survey – almost 10 cents higher per gallon compared to the first week of January and nearly 29 cents higher per gallon compared to the same time last year.]
Further, 49% of Gen Y consumers in Deloitte’s poll said they are willing to pay an additional $300 for each mile-per-gallon of improvement they can get out of a hybrid – only $50 less than the $350 mile-per-gallon premium that Deloitte estimates a hybrid vehicle currently costs compared to an internal-combustion engine vehicle.
“Gen Y consumers also view hybrid technology as proven and reliable," stressed Giffi. “Almost six in 10 Gen Y respondents prefer a hybrid over any other type of vehicle, whereas a mere two in 100 prefer a pure battery electric vehicle – demonstrating that Gen Y is familiar and comfortable with hybrid technology, but not so much with battery-only technology.”
[On a related tangent, check out the crash test work Volvo Trucks is doing to beef battery pack protection for its hybrid commercial vehicles.]
However, Deloitte unearthed this critical perspective as well: Gen Y respondents are married to the convenience of traditional gasoline-powered automobiles, strongly preferring powertrains that do not require plug-in recharging.
Even with their overall preference for hybrids, Gen Y consumers still prefer a non-plug-in hybrid by a margin of more than two-to-one over a plug-in version, Deloitte found in its poll.
Now, what does this all of this mean for the commercial fleet sector? Well, a separate a very distinct survey of the medium- and heavy-duty hybrid truck arena by Pike Research finds that many of the same factors are in play Deloitte uncovered among consumers – namely, that the greater fuel efficiency hybrids offer is starting to generate a lot of demand.
Pike predicts that the worldwide market for hybrids and plug-in trucks will grow at 92% in 2012, with total sales surpassing 19,000 units. Going forward, the firm expects the market to experience a compound annual growth rate of 47.2% between 2011 and 2017, reaching sales of 100,746 hybrid truck units in five years.
“The performance of specific economic sectors will play a big role in the growth of electric drivetrains for trucks,” noted Dave Hurst, a senior analyst with Pike. “For example, as the retail industry rebounds, pick-up and delivery vehicle sales will rebound with it. This in turn will have a positive impact on the hybrid, plug-in, and battery electric truck markets, as well.”
In sum, it looks like hybrid vehicles – for both the consumer and commercial markets – may be poised to take off. That of course will depend on how the global economy fares over the next several years, in light of all the worries over Europe’s sovereign debt issues and other problems. So we’ll wait and see if the hybrid ball really does get rolling.
On a final note, because it’s Friday and we all could use a little break from the grind, check out the latest Volkswagen commercial -- with the automaker again channeling some “Star Wars” mojo in a most creative way, crafting a VERY unique version of John William’s immortal “Imperial March” (more commonly known as the “Darth Vader's theme").
Have a safe and happy weekend!