Photo credit: Bloomberg
Future Product Pipeline
March 25, 2016 – 9:16 am ET
NEW YORK (Bloomberg) — Automakers revealed an assortment of fuel-efficient electric and hybrid models at the New York auto show, demonstrating their efforts to meet regulatory demands even as U.S. consumers snap up SUVs and pickups amid relatively cheap gasoline.
Hyundai Motor Co. showed off three Ioniq models: a hybrid, a plug-in hybrid and a battery-powered version. Toyota Motor Corp. wheeled out a new plug-in version of its hybrid line called Prius Prime. The Koenigsegg Regera supercar revealed Thursday combines electric drive with a V-8 engine to generate more than 1,500 horsepower.
Among SUVs, Toyota showed a hybrid version of its Highlander, Honda Motor Co.’s Acura MDX will get a new “sport hybrid” option and even the Maserati Levante is available in hybrid form.
The offerings reflect the pressure on automakers to meet U.S. requirements to boost average fuel-economy ratings to 54.5 miles per gallon by 2025 as well as rules in states such as California demanding more sales of zero-emission vehicles.
“Automakers simply must be willing to take a loss on the mainstream hybrids, etc. until market conditions are more favorable,” Jeff Schuster, an analyst with LMC Automotive, said in an e-mail on Wednesday. “This is easy to do when you are printing money from SUV and pickup sales.”
Honda aims to have hybrids or other clean technologies account for two thirds of its sales by 2030, Executive Vice President John Mendel said in an interview on Thursday in New York. He said that hybrids and pure electrics are a “mainstay” for the industry as regulators impose restrictions on fuel consumption.
“The EV strategy is still alive and well,” he said. ”Fuel is a finite commodity” and prices “will go up again.”
Strategy of hope
The hardest part of meeting the regulations isn’t developing the technology, he said — it’s getting consumers to buy the cars. As of now, regulators are relying on “hope” that consumers will want to buy the more efficient vehicles, he said.
“Hope probably shouldn’t be our only strategy,” Mendel said. The U.S. needs “something that makes an economic case for the consumer to do what the government wants them to do, which is consume less fossil fuels.”
The market share of green cars fell 18 percent from last year through the first two months of 2016, and down by more than a third from their peak in 2013, said Jessica Caldwell, an analyst with Edmunds.com, in part because traditional cars have gotten more efficient.
Offering an electric vehicle means “you’re asking people to adopt a slightly different driving experience,” she said. “For consumers trading in an older vehicle, they are likely to see a nice bump in the fuel economy, and for many people that is enough.”
Automakers are using the technologies and their different strengths as effectively as they can, said Eric Noble, president of automotive consulting firm CarLab.
“Electric motors are good for acceleration and for the stop-and-go of urban duty cycles. Internal combustion engines are great for highway driving because gasoline is an incredibly dense power source,” he said. “What you’re seeing at this show is that automakers are combining the two, in a wide variety of ways, for the benefit of consumers.”