PHEV Buyers Have Certain Wants, Needs, Experts Say

SAN FRANCISCO – As more plug-in electric-hybrid vehicles enter a market where only traditional hybrids have been a viable alternative to gasoline-powered cars, a profile of PHEV customers is beginning to emerge, a panel of experts says.

PHEV buyers tend to have higher disposable incomes and greater interest in technology, says Mike Dovorany, a consultant with the Carlab, an Orange, CA-based consultancy.

Those findings are not surprising, given the advanced technology of PHEVs and higher prices their larger battery packs command.

But despite their relative affluence, Dovorany says most PHEV owners are interested in calculating the payback period in which the fuel savings surpass the premium paid for their vehicle.

What is troubling for auto makers offering PHEVs is consumers often determine the payback period is too lengthy. That can be corrected by installing smaller battery packs in the vehicles, he says during a recent panel discussion here.

“With some of the early (PHEVs) we’ve seen, it’s our opinion (auto makers) are packaging more battery than they need to,” Dovorany says. “It drives up the cost premium.”

He points to two newer PHEVs, the Ford C-Max Energi and Toyota Prius PHEV, as vehicles equipped with right-sized batteries. The C-Max has a 21-mile (33-km) EV-only range, while the Prius can travel 11 miles (17 km).

Once the PHEV is purchased, owners tend to charge them regularly. Some do so because they want to travel on electricity as often as possible, while others feel obligated because they chose to buy a vehicle using electric power.

While most PHEV owners generally maintain a charge in their vehicles, questions persist as to whether the inconvenience of charging will prompt some of them to trade in their plug-in hybrid for a traditional gasoline-powered vehicle.

Mike Tinskey, Ford manager-vehicle electrification and infrastructure, says inductive charging would make it easier for owners to recharge their vehicles and perhaps more likely to purchase another PHEV.

The technology, also called wireless charging, uses an electromagnetic field to transfer energy between two objects and has been popular among consumer electronic users for years. In theory, an EV owner could have a large mat placed on his garage floor and recharge simply by parking over it.

Wireless charging works, Tinskey says, but it must undergo further testing to qualify as automotive grade. “All OEMs, including ourselves, are working on it. We’ve proven it works; now it’s a matter of making sure it works under all conditions.”

While battery-electric vehicles often create range anxiety, a term describing the feeling a rapidly depleting battery causes drivers, plug-in hybrid owners experience “gas anxiety,” Dovorany says. “PHEV owners only want to use the (gasoline) engine when they have to.”

Tom Turrentine, director of the Plug-In Hybrid Electric Vehicle Research Center at the University of California-Davis, says while PHEV owners tend to have higher incomes than hybrid buyers, they are a diverse group overall.

Some purchase plug-in hybrids because they want to help wean the U.S. off foreign oil, while others buy them out of concerns about air quality. And although they may be more technologically savvy than the typical vehicle owner, PHEV buyers still are bewildered by what goes on underneath the hood.

“One point of reference they do have is (when) they plug in the car and also put gas in,” Turrentine says. But plug-in hybrid owners who don’t fully understand the workings of an electric motor or internal-combustion engine must rely mainly on instrument-panel readouts.

Although PHEVs and other electrified vehicles seemingly have been embraced by their owners, sales have been tepid, accounting for just 3.2% of U.S. light-vehicle deliveries this year, WardsAuto data shows.

Tinskey says sales have been on the rise, noting that although it took from 2004-2011 for electrified vehicles to achieve a 2% U.S. penetration rate, the pace has picked up since last year.

“From October 2011 to October 2012, we’ve seen the market share of (hybrid-electric and battery-electric vehicles and PHEVs) go from 2.0% to 3.7%,” he says. “So we’re seeing the acceleration, yet fuel prices have drifted down a bit.”

Sales have been rising, but so have the number of electrified-vehicle offerings, which may explain the hike in deliveries.

According to WardsAuto data, electrified-vehicle sales in 2000 numbered 9,813 units, but there only were two volume nameplates in the segment, the Toyota Prius and Honda Insight hybrids. EV deliveries hit five digits the next year with 20,320 deliveries, most of them Priuses.

Volumes rose steadily from 2001, hitting 205,834 units in 2005 for a 1.2% share of the U.S. market. By then, eight electrified vehicles were offered. A 2.2% penetration rate was achieved in 2007 with 352,872 deliveries among 14 nameplates.

Through October, U.S. electrified-vehicle sales reached 387,607 units with 51 nameplates.

“We’re moving into new territory,” Turrentine says. “In 1990, we were thinking about (the electrified-vehicle market) and how it would go. Now there is a whole spectrum of products.”

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