Hybrid Electric Vehicles: Consumer Misperceptions

Many efforts have been made to reduce emissions into the atmosphere in the past 25 years, however the number of cars on the road and the average number of miles driven has been steadily increasing. Vehicle exhaust accounts for almost half of the ozone forming emissions produced in California. A mass switch-over to HEVs would reduce emissions into the atmosphere and reduce US dependence on foreign oil. Hybrid electric technology is expensive, and despite government subsidies and tax breaks, the cost of HEVs to consumers remains $3000 $10000 higher than comparable vehicles. Many public outreach programs have been created to overcome public misconceptions in order to undermine the high cost of HEVs. This study showed that the public still has many misconceptions regarding HEVs, primarily regarding how HEVs compare to gas powered vehicles and how HEVs are maintained. Information pertaining to public awareness was gathered at Honda and Toyota (the two manufacturers that offer HEVs) dealerships via questionnaire survey. The data showed that about a fifth of the participants had never even heard of HEVs. Most of the participants who knew of HEVs, however, indicated that HEVs are worse than conventional vehicles with respects to performance and maintenance and thought that HEVs need to be plugged in overnight for recharging. Overcoming misconceptions such as these could help increase sales of HEVs. Public outreach programs have been successful, but a mass advertising and education campaign could prove to be even more beneficial. Introduction Air quality in California has improved dramatically over the past 25 years, largely due to continued progress in controlling pollution from vehicles. Despite this progress, the number of vehicles driven continues to grow and people are driving an increasing number of miles (Wouk, 1995). Well over half of the ozone-forming emissions produced in California come from the tail pipes of vehicles (Hushcroft, 1993). Vehicle use accounts for 44 percent of the nation’s average oil consumption of 19.8 million barrels per day. A 50 percent increase in the average miles per gallon of cars and SUVs would lead to a 5 percent decrease (one million barrels less per day) on oil imports (Reuyl, 1996). The Partnership for a New Generation of Vehicles was created as a government and industry effort aimed at making more fuel efficient automobiles (Reuyl, 1996). They first focused on creating a zero emissions electric vehicle, but couldn’t develop batteries that would last for more than 80 miles of travel before needing recharging (Shimizu, 1993). Hybrid electric technology proved to be a more practical alternative to gas engines in terms of capabilities and fuel efficiency compared to electric vehicles. Hybrid electric technology increases gas mileage and reduces emissions using an electric motor that works in conjunction with the internal combustion engine. Hybrid electric vehicles (HEVs) feature cutting-edge technology that is costly to manufacture, so even after government subsidies and tax credit for buyers they are not competitively priced. The high cost, along with misconceptions of HEVs due to exposure to old outdated technologies and misleading stories in the media (Urban, 1997) offer obstacles for HEV market success. The high production and consumer costs for HEVs will decrease as the demand for the new technology increases, as is the case with most technologies introduced to the market (Wienberger, 1991). The high costs are a fixed obstacle for the time being, but something can be done to increase public awareness and invalidate misconceptions. Effective marketing strategies are essential in order to increase the demand for HEVs. Although many efforts have been made by state agencies such as the Air Resources Board and the Department of General Services to increase awareness about HEVs (Urban, 1997), this study attempts to show that the public still has many misconceptions which in turn hinder market success. HEVs aren’t necessarily identical in their operation. But in simplistic terms, their systems are similar. An internal combustion engine provides the basic propulsion for the hybrid vehicles but is aided by an onboard electric motor. How and when the electric motor assists can differ, however (Wouk, 1995). For example, in the three different models of HEVs available to the public currently, the electric motor provides torque for the front wheels right at the start of acceleration from a standstill. As the car picks up speed, the internal combustion engine kicks in, and at top highway speeds the gas engine alone provides the power (www.energy.gov). In another type of HEV an internal combustion engine is the sole power source for the rear wheels, while an electric motor provides added power to the front wheels when needed. To date, only three HEV models are currently available in the US – the Toyota Prius, the Honda Insight, and most recently a hybrid version of the popular Honda Civic. These models are comparable to conventional vehicles (CVs) in terms of performance and handling (www.energy.gov). They have better initial acceleration due to the torque from the electric motor which doesn’t rely on a certain rpm level to be reached before high torque is achieved as with gas engines (Wouk, 1995). Tests comparing the performance of HEVs to CVs showed that HEVs are comparable to popular vehicles such as the Toyota Corolla and Honda Accord in terms of acceleration. These models are comparable to conventional vehicles (CVs) in terms of performance and handling (www.energy.gov). HEVs produce some emissions unlike electric vehicles, but t hey are greatly reduced in comparison to conventional vehicles. HEVs are certified better than the SULEV (super ultra low emissions vehicle) level – they are certified at the ‘green’ level (Wouk, 1995). The hybrids available today cut emissions of global warming pollutants by a third to a half, and later models may cut emissions by even more (www.energy.gov). In addition, the Toyota Prius, Honda Insight, and Honda Civic can turn off their engines when the vehicles are at rest – for example, when they’re waiting at a stoplight. This not only saves on fuel but cuts emissions. Also, HEVs never need to be manually recharged; the batteries are continuously recharged while the vehicle is being driven (Wouk, 1995). Much market research has been conducted in order to study vehicle purchasing factors and patterns of consumers. Most published advertising studies range from content analysis and qualitative investigations of consumer perceptions to statistically sophisticated econometric modeling (Shimitzu, 1993). Virtually all of this research tends to fall into two broad categories: a) assessments of the influence of various types of advertising appeals or messages on consumer attitudes and b) studies of specific market segments. As an example of the first category, a study by Urban (1997) tested automobile advertisements using statistics against advertising without statistics. He concluded that consumers considered the advertisements containing statistics to be more effective. In the second category of studies, researchers have focused on differences between types of consumers as defined by various segmentation variables. HEVs feature cutting edge technology – for some customers, this is a positive benefit. The manufacturer marketing strategies used in early demonstration programs focused on “early adopters” and “techno champs” for that reason (Thione, 1993). For other customers, however, the introduction of new technology is cause for hesitation. Such customers will need additional information and consultation. They will also be very sensitive to any perception that the HEV market has no future (Sukhdail, 1995). A survey study conducted by the Office of Transportation Technologies (OTT), a branch of the Department of Energy, showed that the customer’s willingness to pay a premium for fuel economy and emissions improvements is limited. By combining the results of several surveys, they further found that fuel economy has not been an important consideration since the mid-1980s (www.energy.gov). The Electric Power Research Institute (EPRI) conducted a study on people’s propensity to purchase HEVs before and after obtaining a better understanding of the various options and the attributes HEVs could offer. Their results showed that the focus group in their study were more interested in purchasing an HEV once they were made aware of the advantages (Reuyl, 1996). These studies show that information about the impacts of driving on the environment and awareness of the benefits of HEVs are key to the market success of HEVs. In order to develop a sustainable market for HEVs, sales need to be increased by advancing awareness about the new technology and the benefits it offers. Many people are unaware of the capabilities of the new production HEVs on the road today. Most people have misconceptions about HEVs. These misconceptions are partly due to exposure to old outdated technologies or misleading stories in the media (Urban, 1997). The perception of electric vehicles being slow, unable to travel long distances, and in constant need of recharging has been extended to HEVs (Thione, 1993), and this association needs to be dispelled. HEV stakeholders have taken significant steps to get the word out about HEVs. To date, the Air Resources Board (ARB) and Department of General Services have been very proactive in conducting public outreach to schools, community events, and community groups. The Sacramento Municipal Utility District (SMUD) has produced excellent outreach materials providing information on HEVs. SMUD also showcases HEVs at local schools and community events in order to increase awareness. The US Department of Energy has formed a group called the Green Vehicle Marketing Alliance to address and promote green vehicle marketing. This group is made up of representatives of the auto industry, federal, state and local government agencies, environmental and consumer organizations. These stakeholders come together to form an improved mutual understanding of the challenges of and opportunities for marketing environmentally friendly vehicles (Fukuyama, 1992). These efforts have advanced awareness of HEVs, but many people remain in the dark about the advantages and benefits of HEVs. This study will attempt to a) show that public knowledge regarding HEVs is low despite the public awareness advancing efforts and b) emphasize the importance of a mass advertising campaign to advance sales of HEVs.