Consumer preferences are always shifting. In the case of the auto industry, this means sales of cars with internal combustion engines may have hit their peak in 2019.
Tom Libby, an IHS analyst who studies brand loyalty, said during a recent seminar, data collected this year indicates there has been a migration to hybrids and electric vehicles. Moreover, the loyalty of buyers purchasing vehicles with alternative powertrains is very high. Part of the high loyalty numbers reflect the loyalty of Tesla’s buyers, but it also extends to other brands, he said.
Even with the semiconductor shortage, one trend apparent this year is the growing acceptance of electrified vehicles. Toyota, Hyundai, Volvo and Ford introduced several electrified vehicles this year. Overall the numbers for a variety of hybrid and battery electric models are quite high when measured against gasoline engines, Libby said.
The 20 highest volume hybrids across all brands tripled their registrations during the first half of 2021. Sales of pure battery electric vehicles are up by 50%, Libby added.
So far this year, Toyota, a battery-electric skeptic, reports alternative powertrains, mostly hybrids, accounted for 24.2% of its vehicles in sold in North America in 2021. Toyota’s decision to lower the price of several hybrid models and add hybrid versions in other categories have boosted sales 113.7%, according to figures released by Toyota Motor North America.
Trend reflected in sales figures
The same trend prevails at Volvo where the so-called alternative powertrain vehicles account for more than 18% of total sales. Hyundai reported sales of its eco-friendly vehicles increased by 348% thanks to strong demand for vehicles such as the Nexo, Kona EV and Ionic PHEV.
EVs and hybrids accounted for more than 5% of Ford’s sales in September and the number is likely to go higher with the introduction of the hybrid Maverick this month.
Meanwhile, the Financial Times reported this week sales of electrified vehicles across Europe jumped from 118,000 in 2018 to more than 1.1 million units this year.
Consumer sentiment shifts
The growth in sales also reflects changes in consumer sentiment and expectations. EVs and hybrids cost more initially but their operating costs are lower long term, survey indicated. With fuel prices on the upswing, long-term considerations make EVs and hybrids more affordable for a wider swath of consumers.
A survey by Pew Research done this summer showed 39% of the consumers in the U.S. are willing to consider an EV for their next purchase. At the same time, surveys show younger consumers, who are becoming the majority of vehicle buyers, are more likely to consider and EV or a hybrid than older Baby Boomers.