EXECUTIVE

SUMMARY
HYBRID AND ELECTRIC CARS
US, FEBRUARY 2016

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HYBRID AND ELECTRIC CARS, US - FEBRUARY 2016

The issues
Falling fuel prices affect hybrid and
electric car market
With fuel prices falling to their lowest
point in over a decade, consumers are
no longer incentivized to buy the most
fuel-efficient vehicles possible, and this
is leading to stagnation in the hybrid and
electric car market. When gas prices were
high, consumers looking to save money
were open to considering hybrid or electric
vehicles. This is no longer the reality; as fuel
prices go down more consumers are turning
to larger vehicles like trucks, SUVs and
crossovers. The challenge for automakers is
that they must continue to produce electric
cars, referred in the industry as compliance
vehicles, in order to follow government
regulations requiring fleets to average 54.5
mpg by 2020 nationally. Essentially, EVs are
produced to respond to the Environmental
Protection Agencys initiative to reduce
global warming as opposed to responding to
consumers demands. Consequently Mintel
predicts that the hybrid and electric cars

market will be inconsistent in the upcoming

years.
Electric car range and
infrastructure not yet up to snuff
Electric cars still offer total ranges between
charges that are too short to be of use to
most drivers and recharging still takes
too long in most cases. On top of that,
charging stations arent always plentiful or
convenient, even in large urban centers.
That poses a problem for electric-car buyers
who dont have a place to charge at home.
Until significant improvement is made in
the availability of charging stations and the
amount of time it takes to fully charge a car,
consumers will not seriously think about
hybrids and electrics.

The opportunities
Extended-range electrics could
provide a bridge
Extended-range electric vehicles vehicles
that have an electric motor but also have a

gas engine that can be used to both extend

range and recharge the batteries might
help bridge the gap between traditional and
alternative powertrains. Unlike hybrids, these
vehicles will run primarily off of their electric
motors in most cases, but with a gas engine
available to boost the range. The benefit
of these cars is that they give drivers more
peace of mind when it comes to potentially
being stranded by an electric vehicle that
has run out of juice. This is a great option for
consumers interested in the market but not
fully committed to switching to an electric car.
Supercharging is on the way
Tesla and other automakers are already
working on a network of supercharger
stations which will allow electric vehicle
owners who are on road trips to stop and
get a portion of a full charge in a short
time. Not only will the presence of these
superchargers possibly make the purchase
of an electric car more appealing, but they
could help spur development of faster
charging stations. Once the technology is
fully developed and available in several

FIGURE 1: TOTAL US SALES AND FAN CHART FORECAST OF HYBRID AND PLUG-IN VEHICLES, AT CURRENT PRICES, 2010-20

Source: hybridcars.com/Mintel

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HYBRID AND ELECTRIC CARS, US - FEBRUARY 2016

locations, consumers will be more open to

the idea of owning an electric car.
Millennial men and Boomer women
potential key segments
Half of Millennial men have shopped or
researched for a hybrid or electric car. This
speaks to the interest of the generation in
being conscious consumers. In addition,
growing up in a tech environment with cell
phones and video games, the concept of a
hybrid or electric car may not be surprising
to them; because of their exposure to
technology they are more likely to be
curious and open to trying these cars.

Interestingly, about half of Boomer women

expressed an interest to research and
consider shopping for a hybrid or electric
car in the near future. This interest may
stem from their desire to do their part in
protecting the environment. While majority
of Boomer women recognize that hybrid and
electric cars are environmentally friendly,
close to half admit not knowing enough
about them to justify their cost, which they
believe is high. In order to capture Boomer
women, companies will need to focus on
educating them on the benefits and value of
owning a hybrid or electric car. Focusing on
emotionally connecting to this group is key
to capturing their attention.

What it means
With fuel prices down and infrastructure
not fully formed, the hybrid and electric
car market is likely to stall out in the near
term. But anything that shocks the market
such as a sudden jump in oil prices or
a breakthrough in electric-car range or
recharge times could give it a jumpstart. In
the meantime, automakers are challenged
to uncover creative strategies to spark
consumers interest in hybrid and electric
cars. Finding ways to demonstrate the value
of owning such cars should be top of mind
for the next few years.

FIGURE 2: PURCHASE CONSIDERATION, BY GENDER AND AGE, DECEMBER 2015

Base: 1,906 internet users aged 18+ who currently do not own a hybrid
Source: Lightspeed GMI/Mintel

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