Hybrid Limits
Ever since it came out earlier this month, I've been scratching my head about a J.D. Power projection that sales of hybrid cars will plateau at about 3% of all cars sold in the US. They are currently about 0.5% of the market, based on only a couple of models from Toyota, Honda and Ford. My concerns about this forecast go beyond the assumptions J.D. Power makes, relating to fuel costs, subsidies and the cost premium for buying a hybrid. In particular, I'd like to know if they thought about more than one scenario for hybrids.

In some respects, hybrid cars represent the first really new vehicle type in decades, powered as they are by a combination of mechanical and electric drivetrains. But in another sense, they simply reflect the continuous evolution of the automobile from the days of Henry Ford. Even ignoring hybrid drive units, cars are increasingly becoming electrical devices, as much as mechanical ones. This has benefits and drawbacks, as I discussed in a recent posting.

This notion of evolution points to ways in with the projection in question might indeed come true, and ways in which it could look downright silly in a decade. For example, what if some of the components that make today's hybrid a hybrid--electric motors, regenerative braking, onboard storage of electricity for propulsion, and power management hardware and software--became as commonplace in mass production cars as the hydraulic innovations of an earlier generation, such as power steering, power brakes and automatic transmissions? In a decade, it might be hard to tell a hybrid car from a non-hybrid. In this case "true" hybrids might indeed account for only a small fraction of all cars, but their influence would be much broader.

Or consider that hybrids may start to branch out by incorporating power plants other than the gasoline internal combustion engine. Diesel hybrids are an obvious choice, and even micro-turbine hybrids look possible. The first fuel cell vehicles will also likely be hybrids, because of the high cost of building a fuel cell stack big enouch to deliver the peak power output required for highway driving. So if hybrids come to include essentially all cars with complex power sources, then it's difficult to imagine that they will reach some natural limit at 3% of the market, even with all the other improvements that non-hybrids will incorporate by then.

The real value of J.D. Power's forecast is not as a prediction, but as something that forces us to think about the issues involved more concretely, including just what we mean by a hybrid in the first place. Considering all this, I give them full credit for having the guts to put this out for everyone else to shoot at.