J.D. Power Expects Green Car Sales Below 10 Percent Through 2016

Despite rising gas prices, hybrids and electric vehicles will remain below 10 percent of the U.S. market through 2016, automotive forecaster J.D. Power and Associates predicted in a study released on April 27.

The 2011 U.S. Green Automotive Study said that growth in the sales of vehicles with alternative powertrains will be limited by consumer concerns about costs and function, with the bottom line being, most consumers want to be green, but not if there is a significant personal cost to them.

Automakers are spending billions of dollars making huge bets on electric vehicles, and ramping up hybrid and EV offerings. They face new government fuel efficiency mandates, and greater demand for fuel-sipping vehicles, as the price of gas has topped $4 a gallon in several states. Nearly every major automaker plans new electric vehicles during the next year or so.

While consumers often cite saving money on fuel as the primary benefit of owning an alternative vehicle, the reality for many is that the initial cost of these vehicles is too high, even as fuel prices in the United States soar, J.D. Power said.

Its study included a survey of more than 4,000 consumers that found concerns about the price of alternative powertrain vehicles — particularly for gas-electric hybrid vehicles — has become more of an issue, compared with prior years.

A separate study, by Deloitte LLP, said 78 percent of U.S. consumers would consider buying an electric vehicle when fuel prices reach $5 per gallon. It surveyed 12,000 consumers globally, including more than 1,000 in the United States.

The Alliance of Automobile Manufacturers, the trade group representing Detroit's Big Three, Toyota Motor Corp., and seven other automakers, said consumers still have to be convinced to spend more money upfront for hybrids and electric vehicles.

In the short term, American consumers are flocking to cheaper fuel-efficient models with conventional engines that get from 30-40 miles per gallon, and cost $5,000 or less than hybrids.

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