A new study by J.D. Power and associates is projecting that the combined market share of diesel and hybrid power-trains will hit seventeen percent in the U.S. by the middle of the next decade. The analysis also projects that smaller displacement four cylinder and flex-fuel engines will take a much larger share than they do today as demand wanes for more powerful engines. Between the diesels and hybrids, the former are expected to take a significantly larger share due to lower cost. The cost premium for hybrids is expected to remain higher going forward. This extra cost will drive more adoption of technologies like direct fuel injection and turbocharging of smaller displacement gas engines going forward since the cost is a lot lower.

Power is projecting that the cost premium for automakers to achieve the 35mpg standard will be $4,000-5,000 even though cars in Europe already meet that threshold. The study apparently presumes that American car buyers won't be willing to shift to the smaller, lower powered cars that dominate the European market. If U.S. car buyers insist on continuing to drive larger cars and trunks while trying to achieve those higher mileage numbers, it will be costly to make the upgrades. If on the other hand they are willing to change their buying habits, the premium could be a lot smaller. Pure battery electrics and fuel cells will probably both remain a negligible part of the market primarily due to high cost.

[Source: Detroit News]


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