Hybrid Cars’ Market Share Falls, Business and Industry Trends Analysis

Toyota and Honda have been selling hybrid gasoline/electric cars in the U.S. since 2001.  However, interest in hybrids is impacted by the significant drop in gasoline prices starting in 2014.  Hybridcars.com reported that sales of hybrids in the U.S. fell from 495,700 in 2013 to 347,000 by 2016.  2017 saw sales rise by 12.4% to reach 368,137. 

A typical hybrid design places two engines in a vehicle, one a traditional internal combustion motor and the other electric.  The traditional engine powers the car at startup and when accelerating, and charges the electric engine’s battery (separate from the gasoline-powered motor’s battery).  When slowing down or idling, the standard engine shuts down and the electric motor takes over.  The batteries are also charged when a car is rapidly decelerating, bleeding off forward momentum to power the generators.  The downside:  hybrid cars can cost significantly more than their standard powered counterparts, and many drivers have found actual fuel efficiency to be significantly lower than EPA estimates.

Car makers hope to further fuel hybrid sales through the introduction of better lithium-ion batteries, as opposed to the nickel-metal-hydride batteries traditionally used.  However, for the long-term, more advanced technologies such as lithium-air hold significant promise.

The auto industry is clearly in a period of transition.  Most of the world’s major auto brands plan a significant shift of production to more and more hybrid and all-electric vehicles.  Toyota plans for such cars to make up one-half of its global sales by 2030.  Honda, Volkswagen and others have announced massive investments in new hybrid and electric production.  Better battery technology, clean air standards and fuel efficiency standards are driving this trend.

In China, auto manufacturers including Geely Automobile Holdings and FAW Group Corp. are planning to introduce hybrid cars with 48-volt battery systems, which offer about a 15% fuel economy boost over gasoline-only vehicles.  The intent is to keep retail prices low while boosting MPG.  These so-called “mild” hybrids do not offer the fuel economy of hybrids such as Toyota’s Prius (which offer 200-volt batteries), however they are priced far below full hybrids.  As of mid-2017, battery manufacturers outside China, including Bosch, Continental, Delphi and Valeo, had jumped on the 48-volt bandwagon.  Audi is working on a Q8 Sport Concept crossover vehicle that uses the technology, while Bentley’s high-end 2017 Bentayga SUV has a 48-volt active anti-roll bar that reduces the vehicle’s lean in tight turns.

On the commercial side, Daimler Buses North America has sold significant numbers of its Orion VII diesel-electric hybrid buses.  The Orion VII utilizes a propulsion system made by BAE Systems which in turn derives power from a Cummins diesel engine and an electric motor powered by a generator and a lithium-ion battery.  Meanwhile, several manufacturers, including Hero, are marketing hybrid scooters.