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Breakthrough Analysis

Hybrid Cars

by William E. Halal
Monday, October 15, 2007


Event | Data Points | Forecast Data Analysis | Trend Analysis | Articles  

Under the leadership of Japanese carmakers, the first alternative to the conventional internal combustion engine has been so successful that it seems likely to revolutionize car design. Hybrid autos are powered by a small gasoline engine operating only at high speeds where it is most efficient and a battery at lower speeds, providing huge gains in fuel efficiency and reductions in pollution. Diesel engines may even work better. Hybrids use electric motors to drive wheels, the battery to store energy, regenerative braking to conserve it, and may in time use composite bodies that are lighter. If present indications hold and improvements are made in cost, TechCast estimates 30% adoption by 2012, which would easily translate into a global market in the $ trillions.

Event Being Forecast

Hybrid powered autos make up 30% of the new car market.


Selected Data Points to Consider

• Conservative estimates forecast 1 million cars sold per year by the end of this decade, 2% of the 65 M global market.

• One analyst projects 3 million hybrids/year (6%) by 2015. (Washington Post, 12/14/04)

• William Ford, CEO of Ford Motors, thinks hybrids could make up 75% of the car market by 2025 (BusinessWeek, 10/27/03)

• But a German auto executive forecasts “internal combustion engines will still have 95% of the car market in 2015 and 85% in 2025 (BusinessWeek, 9/5/03).

• J.D. Power estimates hybrids will make up 4% of car sales by 2010. (NewsWeek, 10/10/05

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Forecast Data Analysis

    Mean Std Dev N (# Experts)
Most Likely Year 2013 3 49
Market Size ($B) 340 198
Confidence (%) 70 15

In addition, 4 experts predicted that this event would never occur; mean confidence: 56%; std. dev.: 17.8.

Note: "Most Likely Year" is the year when this technology is expected to reach the adoption level stated under "Event Being Forecast" in industrial nations like the US, EU, and Japan. "Confidence" is the confidence our experts place in this forecst. "Market Size" estimates the potential market demand when this rechnology matures; global figures are not available, so this estimate is for the U.S. economy.

Forecast Chart

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Trend Analysis

PROS: Trends Driving this Event

  1. BIG ADVANTAGES Hybrids reduce pollution dramatically and get up to 70 MPG, and they should improve considerably. Toyota’s second Prius is comparable to a Camry in size, price, and performance and has a high-tech style buyers love. Toyota expects to sell 300,000/year by ‘05 and is building versions for its entire product line. (BusinessWeek, 10/6/03) Sony is experimenting with the use of solar cells on the roof to augment the battery. Equipped with high-capacity batteries, "plug-in hybrids" are being built by GM and others so they can recharge at night with energy from the grid costing the equivalent of $1/gallon. (TechnologyReview Sept/Oct 2007) In addition to reducing costs, plug-in hybrids will provide storage for renewable energy like wind that are available intermittantly and the fleet of cars could serve as a source of backup power to the grid. (TechnologyReview, 5/24/06; 12/21/06)

    • Ford is developing hybrids in it's entire product line.
    • 800 hybrid buses are being used in US cities, and the U.S. army is testing a hybrid truck. (, 3/21/03) Large vehicles are good targets because they use half of all gas in the U.S. (TechnologyReview, 6/5/06)
    • GM announced that it will build 1 million hybrids by 2007. (Technology Review, 4/04)
    • JD Powers thinks there will be 30 or more models out soon.
    • Volkswagen has built a car using light weight carbon fiber composite metals, increasing fuel efficiency to 239 MPG.

  3. COST SHOULD DROP Sales should increase dramatically as more hybrid vehicles are built," said J.D. Power’s director of global forecasting. A Japanese auto executive said ”Companies will start earning returns in 3-5 years.”

CONS: Obstacles Opposing this Event

  1. HIGH COST Hybrids are still uneconomical, costing $3,000 more than conventional cars. J.D. Power Company said "We don't expect hybrids to become mainstream soon," and an auto executive said “The majority of Americans …don’t give a damn about hybrids.” (BusinessWeek, 10/27/03). The saving in fuel only amounts to about $300/year, less than the added cost.

  2. SLOW CHANGES Because cars last 15 years or so, it takes a long time to change the fleet of vehicles. Hybrids were first introduced in 1999 but only made up 1% of the US auto fleet in 2006.

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