Lang Aftermarket iReport: Electric & hybrid aftermarket ‘big hype but small bang’
“Despite the hype surrounding battery electric vehicles (BEV) and hybrid electric vehicles, their impact on the 2018 U.S. aftermarket has been limited and they will record only minor aftermarket product gains over the next five to 10 years.
“Battery electric vehicles reached 3 percent of 2018 new vehicle sales in the U.S., with hybrid electric vehicles sinking to 2 percent of the 2018 market. Even combined, they accounted for less than 2.5 percent of all cars and light trucks on U.S. roads during 2018.”
– Jim Lang, publisher, Lang Aftermarket iReport
Big Hype but Small Bang
Until battery electric vehicles and hybrid electric vehicles capture a larger share of the U.S. new car and light truck market, their aftermarket product impact will be limited.
The battery electric vehicle (BEV) sales share tripled between 2013 and 2018, but hybrid electrics dropped one-third in their share of new vehicle volume.
Their combined share of the new vehicle market in the U.S. recorded only a modest increase between 2013 and 2018, from 4 percent to 5 percent of annual car and light truck volume
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Vehicles in Operation
Battery electric models accounted for less than 0.5 percent of all vehicles in operation (VIO) in the U.S. during 2018, with hybrids falling just short of 2 percent share.
Since most battery electric and hybrid vehicles in operation during 2018 were less than 5 years old, their combined aftermarket product share barely reached 1 percent last year.
Three Barriers to Greater BEV and Hybrid Sales
Three major barriers have limited electric and hybrid new vehicle U.S. sales so far: range, battery life and replacement costs, and vehicle purchase price.
The performance gap between conventional gas-engine vehicles and electric/hybrid models is greatest in terms of operating range.
While new electric and hybrid models continued to increase their battery-powered driving range, the bulk of these vehicles on the road during 2018 were relatively limited in their battery-operating range, undercutting their appeal to consumers.
Battery Life and Replacement Cost
“Two key issues for battery electric vehicles and hybrids are the life of their battery systems and the replacement costs.
In some cases, estimated battery replacement costs are so high that the operating life of some BEV and hybrid models might not be much beyond the life of their original battery systems.
The problems with battery life and replacement costs are reflected in the generally lower used vehicle values of BEV and hybrid models compared to similar gas-powered cars and light trucks.
Vehicle Purchase Price
When they see the purchase price differences between alternative-powered vehicles and conventional models, many consumers lose their enthusiasm for battery electric and hybrid vehicles.
Even with generous rebates and government incentives (which are being phased out), battery electric vehicles can cost up to 25 percent more than comparable internal combustion models, with hybrids often carrying a 20 percent purchase price premium.
Limited Aftermarket Impact
Lang Marketing expects that battery electric and hybrid vehicles will have little impact on the aftermarket until after 2025.
Without technological breakthroughs, purchase price reductions and the development of a charging system infrastructure, a significant aftermarket impact of battery electric and hybrid vehicles could be as far off as 10 years or more.
Six Major Takeaways
- Until battery electric vehicles and hybrid vehicles capture a larger share of new car and light truck volume in the U.S., their aftermarket impact will be limited.
- Battery electric vehicles accounted for less than 0.5 percent of vehicles on U.S. roads during 2018.
- Hybrid vehicles failed to reach 2 percent of the light vehicle 2018 population.
- Most electric and hybrid vehicles on U.S. roads during 2018 were less than 5 years old, limiting their aftermarket impact.
- Three major barriers have limited new electric (BEV) and hybrid vehicle U.S. sales: range, battery life and replacement cost, and purchase price.
- Lang Marketing expects battery electric and hybrid vehicles will not have much aftermarket impact before 2030.
FUN, INTERESTING & COOL AUTO FACTS: http://bit.ly/FunInterestingCoolAutoFacts
Copyright 2019 by Lang Marketing Resources, Inc.
NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.