Latest report from NADA Used Car Guide analysts measures new and used sales success of alternative-powered vehicles in the US
The latest bimonthly edition of NADA Used Car Guide's Perspective report pits the retention values of traditionally powered (gasoline or diesel) vehicles against more eco-friendly alternatives in the marketplace (think hybrids, plug-in hybrids, electrics, natural gas and fuel cells). The report delivers insight into how both types of vehicles have performed sales-wise in the new market, as well as how they've fared from a used vehicle value retention standpoint.
The document points out that it may seem logical to assume alternative powertrains have gained significant traction among today's consumers, however, that is not what sales data tells NADA Used Car Guide analysts.
According to Jonathan Banks, NADA Used Car Guide's executive analyst, "Looking at the past three calendar years, a whopping 47.7 million gasoline and diesel-powered vehicles were sold in the U.S. representing 96.6% of total sales over that period."
NADA Used Car Guide's senior manager of market intelligence, Laurence Dixon, added, "By comparison, market share for alternative powertrains decreased from 3.8% in 2013, to just 2.8% in 2015…with sales last year falling below 500,000 units despite the industry achieving nearly 17.4 million new vehicle sales."
Analysts also report that although hybrids, electrics and other "green cars" have been widely available for years, these vehicles have carved out a mere fraction of the market as the vast majority of car buyers remain hesitant or unwilling to forego the familiarity of gas and diesel vehicles for nontraditional powertrains.
So, what sells in the green car market?
The Perspective report notes that hybrids are by far the most prevalent non-gasoline or non-diesel vehicle type with 1.32 million deliveries over the last three years. They account for 79.8% of the alternative powertrain market over the trio of years. However, hybrids as a percent of all alternative powertrain sales have decreased from 83.2% of the market in 2013 to 76.7% in 2015 as demand steadily waned.
The next most significant powertrain type is electric, which in combination with hybrids has firmly maintained just over 90% of the alternative powertrain marketplace over the past few years (natural gas and fuel cell share has been negligible). When analyzing the sales distribution over time, NADA Used Car Guide analysts report that electric vehicle deliveries have risen by close to 50% between 2013 and 2015, while hybrid deliveries fell by just under 23%. Electric vehicles (EVs) accounted for 14.4% of all alternative powertrain sales in the last year, which was a 6.3-percentage point increase over 2013.
Are different alternative powertrain types competing against one another?
With the total market for hybrids and EVs basically unchanged in the past few years, the shift in alternative vehicle sales suggests electric vehicles are not necessarily helping green technologies attain a greater presence in the market. Instead, EVs appear to be growing at the expense of hybrids and are somewhat cannibalizing sales of their green vehicle counterparts.
After sourcing J.D. Power Power Information Network data, analysts dug deep into an analysis of vehicle disposal, also known as consumer conquest. What they present in the report reveals the true dynamics of the alternative powertrain marketplace and tells more about what's going on regarding new versus replacement sales. Looking at electric vehicles, the percentage of disposals across powertrain types has been remarkably static over the past few years, with a marginal increase of diesel disposals exhibited in 2015.
However, after analysis of sales data, it is clear that electrics have gained a greater share of the green vehicle market in recent years, which indicates the uptick in EV purchases reflect an increase in all-new sales as opposed to higher loyalty or conquest from other powertrain types. Among hybrids, the percentage of traditional gas-powered vehicles being traded in for hybrids has decreased over the past few years while hybrid loyalty has increased. This suggests a combination of lower gasoline conquests and all-new hybrid sales has contributed to the shrinking of the hybrid market in favor of electric vehicles.
The report concludes that more plug-in hybrid and electric vehicle drivers are beginning to turn in their vehicles for newer plug-in hybrids or EVs, especially in 2015 when the percentage of disposals reached 6.4% compared to a 3-year average of 3.4%. Hybrid conquests, however, gradually represent a smaller share of disposals among plug-in hybrid electric sales, which is further evidence of diminishing demand for hybrids versus electric vehicle alternatives.
www.nada.com
