Hybrids at no price penalty
Apr 11, 2011 Dr Peter Harrop
IDTechEx forecasts of sales of hybrid cars presume that, as the decade progresses, more and more of them will be offered at no price premium. This is not because costs will converge fully during that time - there will be no outselling of conventional cars to provide superior economy of scale - but because such tactics confer huge marketing advantage. It israther like Tara International in India cheekily offering its pure electric car at one dollar below the price of Tata Motors Nano, the world's lowest cost, full specification on road conventional car. Tata Motors Europe has yet to be embroiled in this Indian encounter, concentrating more on upmarket record breaking in performance as with the Jaguar supercar being developed with revolutionary Bladon Jets range extenders.Of course, premium brands such as Daimler AG Mercedes Benz and Tesla Motors stand above the pricing games for hybrid and pure electric cars. However, mass market vehicles will feel this wind of change. And we shall see a similar scenario unfold with pure electric aircraft pioneered by EADS and ENFICA-FC.
There will be no reason for users not to buy the hybrid option when there is no price premium. It will be rather like the Japanese offering all accessories at no price premium in the 1970s thus gaining huge market share culminating in Toyota becoming the world's largest automotive company, though many other factors also assisted this process.
Belwether of all this is Ford with its bold plan to sell its Lincoln MKZ Hybrid at the same price as its non-hybrid, conventionally-powered stablemate, from 2010. As we predicted, it is paying off in sales. Ford has just announced that sales of the hybrid are running ahead of expectations. The company projected that the hybrid version would represent around 15% of sales within the MKZ product line. However, since January 2011, it has hit more than 20% of sales. Both models are priced at $34,605 MSRP. Ford stresses, "No other four-door luxury sedan - gasoline, diesel or hybrid powertrain - can top the MKZ's certified 41 mpg city and 36 mpg highway EPA rating."
A large part of the reason that Ford can make this groundbreaking offer is because it is using the same drive train found in the Fusion Hybrid, which is essentially the same car as the MKZ, but with fewer refinements. Based on comments coming out of Ford, Lincoln and the MKZ are only at the beginning of the "journey" to redefine the brand and the model. Ford rivals Honda for number two slot in hybrid car sales worldwide and its new model program is currently outgunning Honda.
Image source: Ford
For more read: Hybrid And Pure Electric Cars 2011-2020.