Crap shoot: Cheap EVs and luxury hybrids

Mercury hybrid cars are nearing the end, but they'll be reborn as Lincoln hybrids.

More successful as Lincoln hybrids?

Battery-powered economics

By 2020 hybrids and EVs could achieve as much as 25 percent market penetration, with hybrid cars making up the bulk of those sales according to most analysis. Yet, as automakers strive for cost-effective electric cars, their hybrid focus continues to develop mostly around the luxury market.

Consequently, are automakers really on track for 25 percent penetration by 2020?

For instance, when Mercury dies, it’ll take two hybrids with it. Fortunately, however, those hybrids will eventually be replaced with Lincoln hybrids. Of course, Lincoln means more luxury and higher costs, but since luxury hybrids dominate the hybrid space, at least in terms of numbers, this seems a fitting strategy.

Likewise, while Nissan prepares to offer a cost-effective in its segment electric car (with the help of more than $10,000 in tax incentives in states like California), it’s hybrid focus has been on Infinity, another luxury brand.

Ironically, however, according to the data, it would be easier for automakers to make conventional hybrids more cost-effective for consumers than for pure electric cars (not including tax incentives). Moreover, it’s easier for more consumers to make the shift to hybrids compared to plug-in vehicles.

So, why are so many automakers focused on a relatively ‘cheap’ marquee plug-in vehicle – the Leaf, the Focus, the Volt, etc. – and several luxury hybrids? That certainly doesn’t seem to be a path to 25 percent market penetration, unless the government is planning on unlimited tax incentives through this decade.

Thus, is the current focus on ‘cheap’ EVs and luxury hybrids purely based on chasing government tax incentives, and the desire for green-halo press?

Outside of Toyota, for example, it doesn’t seem that most automakers are ramping up their manufacturing capabilities to be 25 percent hybrid and EV by 2020. Yet, much of even Toyota’s hybrid focus also seems luxury-based.

Despite the hype and some of the rosy predictions, is the future of hybrids and EVs still just a crap shoot?