Hybrid cars

The state of the industry on hybrid cars

In a world of dwindling natural resources, hybrid vehicles, which combine an electric motor or battery with another power source such as a petrol engine, offer an attractive solution. In fact some would say it is the least the auto industry can do since fuel for transport accounts for around a third of the world's energy use, according to the International Energy Agency. Almost all of this energy is in the form of oil, the IEA says, and transport accounts for 60% of total oil usage.

The relationship with oil is at the heart of hybrids' popularity. These vehicles use green technology, which means a reduction in carbon emissions; they are fuel efficient in an era of high petrol prices, and are priced competitively. They also benefit from a range of government incentives across the world. For example, in the UK owners benefit from the lowest band of vehicle excise duty, while in the USA they receive federal income tax credit.

Humble beginnings
Hybrid vehicles have come a long way since Ferdinand Porsche presented his 'Mixte' at the Paris Auto Show in 1901. Porsche used engines with just 2.5hp to power electric motors, achieving a speed limit busting 31mph.  The concept remains very similar today, with two types of hybrid technology most closely associated with the sector. 'Series hybrids' use a combustion engine to generate electricity, which in turn powers an electric motor.

In 'parallel hybrids', the wheels can be either directly powered by the engine or from a battery-powered electric drive-train. Production of these hybrids have grown exponentially recently. In March 2011 Toyota announced that sales of its hybrid vehicles had topped three million. Toyota took 10 years to reach the first million sales, two years after that it reached the second and 21 months on from that it hit the three million mark.

The firm now sells 16 hybrid vehicle models in around 80 countries across the world and has a long term goal of selling one million every year. Manufacturers are increasingly jumping on the hybrid bandwagon, with many rushing to catch up with the Japanese trailblazers. One of the central themes of the 2011 Frankfurt Motor Show was hybrid vehicles, with the debate being not 'if' the future was hybrid, but 'what kind' of hybrid.

Future predictions
Figures from IHS Automotive show that in 2005 the global number of passenger cars and light commercial vehicles produced with traditional hybrid power-train technology stood at just under 343,000. In 2010 that figure was 1.06m and IHS predicts it will top 4.5m in 2020. Even more impressive is the predicted growth of new plug-in hybrids. These can be plugged in to the mains supply in order to give a longer range without any emissions; one example of these is the Chevrolet Volt. In 2005 just nine such vehicles were produced. This had grown to 3,633 in 2010 and IHS forecasts almost 1.34m will be made in 2020. This is a conservative estimate compared to consultancy, Pike Research, which predicts a total of 1.7m plug-in hybrids on the world’s roadways by 2015.

Global picture
But impressive as these figures are, when put in context of total market share it seems hybrids haven't come that far in the last hundred years. Only Japan and the United States have serious market penetration when it comes to hybrids, and in the US they make up less than 2% of the market. If the market evolves as IHS predicts then production of hybrids will make up only 5% of the global share of light vehicles by 2020.

"This is mainly on the grounds of cost and the fact that a large portion of the growth in demand being seen will come from developing markets, where they don't necessarily have the money to spend," says IHS analyst Ian Fletcher. Currently hybrid vehicles can cost around $5,000 more than their petrol equivalents. The IEA estimates owners of present hybrid models will have to own their vehicle for eight years to get their extra investment back in terms of efficiency savings. "Traditional internal combustion engines also have further to give in the way of improvements to fuel efficiency and emissions," Fletcher adds.

Key improvements
Auto manufacturers still have a lot of work to do if they want to make hybrids compete in volume with their all-petrol rivals, which themselves will not stand still, particularly in terms of efficiency. They will have to close the gap in cost and improve battery as well as technical performance. But with oil supplies dwindling, manufacturers firmly on board, and increasing wealth in the developing world, hybrids have the momentum behind them.