Impact And Future Of Hybrid Vehicles In Australia

Published Date: 02 Nov 2017

Aayush Goyal GDEC12CM001

Abhishek Pednekar GDEC12CM002

Amritpal Singh Poon GDEC12CM003

Arun Chander GDEC12CM004

Academic Advisor: Prof. Tharwat Andrawis

IMPACT AND FUTURE OF HYBRID CARS IN AUSTRALIA

TABLE OF CONTENTS

S. No

Title

Page Number

1

Introduction

2

1.1

Brief Introduction to Research Topic

2

1.2

Rationale for Choice of Research Topic

2

1.3

Clear statement of Research Objectives

2

2

Theoretical Framework

3

2.1

Advantages & disadvantages of Hybrid vehicles

4

2.2

Components of the Research Topic

5

2.3

The Hybrid Car Ecosystem

6

3

Literature Review

7

3.1

Hybrid technology development so far

7

3.2

Manufacturers Perspective

9

3.3

Brief overview of Hybrids in Australia

10

3.4

Increasing acceptability of hybrid cars in Australia

11

3.5

Government attitude towards Hybrid Cars in Australia

11

3.6

Future of hybrid technology

12

3.7

Alternate Technologies

13

4

Methodology

14

5

Data Analysis

15

6

Conclusion

17

7

Bibliography

18

Appendices

22

1. INTRODUCTION

1.1 Brief Introduction to Research Topic

This research is undertaken to study and understand the impact and future of Hybrid vehicles in Australia. In a world where oil prices are soaring to new heights and carbon emissions are rising, hybrid cars are being looked at as the next generation transport utility vehicle. Hybrid cars reduce the oil consumption by approximately 50 miles/gallon or even more (www.hybridcarsaustralia.com). The carbon emissions are very low in hybrid vehicles when compared to any other conventional fuel-vehicle. By this research, we also aim to study the consumer acceptance for hybrid cars in Australia.

1.2 Rationale for choice of Research topic

The research on this topic will bring forth various reasons that led to the development of hybrid vehicles. There are a few speculations regarding the sustainability of hybrid cars (Understanding Sustainability), and if hybrid cars are indeed the solution to all environment related issues with automobiles. As stated by auto consultant Jim Hall at the recently concluded Geneva Auto Show 2013 (Clark. J for NDTV, March 2013)." It's about taking socially questionable projects and giving them a veneer of propriety and relevance", this research is meant to understand the current market for hybrid cars and analyse the advantages and disadvantages to the car manufacturing companies by foraying into manufacturing of hybrid cars.

1.3 Clear statement of Research Objectives

This research intends to meet the following objectives:

Understand the emergence and need for development of hybrid cars.

Understand the technology being used for development of hybrid cars.

Evaluate the acceptance of hybrid cars from the perspective of different stakeholders:

Manufacturers

Customers

Government

Evaluate the support available from Australian government towards the manufacturing of hybrid cars in Australia

Look at trends for future development for Hybrid cars

2. THEORETICAL FRAMEWORK

Hybrid cars have been a part of the automotive world for a much longer time than people would actually be aware off. In fact, the first hybrid car was developed back in 1899 by Dr Ferdinand Porsche (CarsDirect, 2009). The car was recognised by the name, The System Lohner-Porsche Mixte, used a then unique fuel engine to supply power to the electric motor which propelled the car wheels. This concept received a good response from the available market, leading to a production of over 300 units. However, this demand for hybrids began to deteriorate, when Henry Ford started the first automobile assembly line in 1904. The ability of Ford to produce contemporary fuel powered cars and offer them at low prices as compared to the hybrid technology dramatically reduced the hybrid vehicle market. Ever since, manufacturers world over have been investing money and time into developing hybrid technology and looking at different ways to improve the technology. A less known fact, the first 4 wheel drive car was a hybrid vehicle. Then came a lull period between 1920 and 1960 during which there was no development on the hybrid car technology.

.

Mass development of the hybrid cars that one sees today, began in the late 90's when Toyota launched the Prius in 1997 (CarsDirect, 2011). This gave rise to interest shown by other automotive manufacturers and entering into development of hybrid technology. This segment is currently being dominated by major players like Toyota, Honda and Ford.

Global warming being a very serious concern globally, and nations looking at reducing their carbon footprint on the planet, hybrid cars have gained importance in many countries. Though, the basic principle for developing hybrids is the same as was used in Porsche's design, the cars being manufactured today commercially are a lot more complicated in comparison. Hybrid technology uses a petrol-driven engine with combination of an electric motor to power the vehicle. The on-board computer uses this combination depending upon the speed of the vehicle. The entire technology has been discussed in detail, as this research progresses (Banas. T, 2010).

It can be very interesting to know, what makes the hybrid cars fuel efficient. The technology in hybrid burns fuel only when it is needed. The electric motor, backed by a stack of rechargeable batteries, is the primary engine responsible for moving the car during lower speeds and in stop-go or city traffic conditions.

During coasting speeds, the driver is only required to lightly tap the brake and the car's wheels automatically are engaged into an electrical generator. This generator creates the extra load required to slow down the car, but more importantly, it uses this mechanical energy and converts it into electrical energy to recharge the batteries.

Hybrids use a concept (ABC News) called regenerative braking where the kinetic energy generated is stored into batteries. According to the definition given on Wikipedia, "Kinetic Energy of an object is the energy it possesses due to its motion". This energy is used to power an electric motor when the car is running at low speeds.

The technology, commonly known as KERS (Kinetic Energy Recovery System) has also found its way in Formula One Racing (P. Evans, 2009). Using the same principle, every time the brakes are applied, the mechanical energy is converted into electrical energy and harnessed to recharge the on-board batteries and released when required for acceleration (Formula1, 2013)..

At high speeds, such as freeway driving, the on-board computers automatically switch on the fuel-burning engine, which automatically takes over as the primary driving engine of the car. Typically, this small engine is designed with variable valve timing intelligence, or VVT-i (P. Evans, 2009), to ensure that the fuel is burned most efficiently and completely. Adjustments in the overlap time between the exhaust valve closing and intake valve opening result in improved engine efficiency (Wikipedia). A technology used by many car manufacturers today.

The electrical motor and gas-powered engine can also operate in sync with each other (P. Evans, 2009). For example, in case of over taking a vehicle or truck on freeway, the on-board computers will automatically activate the electric motor to provide the extra needed acceleration boost in horse-power. If the on-board batteries fall below a certain level of charge, the fuel engine automatically turn on to charge the batteries and run the electrical motor if needed. That's why a hybrid car owner never needs to plug the car into an electrical outlet overnight, a common misunderstanding that many hybrid-makers confess they still need to bring to light among consumers and even some car dealers.

2.1 Advantages & disadvantages of Hybrid vehicles

Hybrid cars are touted to be the future of the automotive industry. There are many areas in which they score over traditional combustion engine based cars:

Environmental benefits

Reduces the amount of carbon dioxide released into the environment

Decreases dependency on fuel and consequently lead to reduction in depletion of oil reserves (Staysure, July 2012)

There are huge savings in fuel cost that can be made in the long run

A hybrid car can reduce fuel consumption by up to 50%

They use no energy when the car is idle

During rush hours, electric cars become even more beneficial with braking increasing the power saved in batteries (Staysure, July 2012).

Hybrid cars are still a relatively new concept in the market and the major challenges are:

At present, hybrid cars are significantly more expensive than their combustion engine counterparts

There is a perception amongst people that hybrid cars may not travel as fast as combustion engine cars and that the initial acceleration will be too slow as the lower speeds are powered by the electric motor

People have raised concern over the toxic nature of the batteries used in hybrid cars (Staysure, July 2012)

Regular garages and work-shops do not service or repair hybrid cars. This makes it mandatory for hybrid car users to take the car back to the company service centre for any problems faced. This aspect adds inconvenience to the customers at large (J.D Power Car Ratings, 2012)

2.2 Components of the Research Topic

The primary reason for the development of Hybrid Cars was the need to improve our carbon foot print on the environment and to look for alternate fuels to reduce depletion of our petroleum reserves. These objectives affect different stakeholders in the Ecosystem in different ways:

Government

Every government sets itself a carbon footprint target each year. The government sets this target based on various factors like degree of industrialization in the country, objectives of the Kyoto protocol etc. The government then tries to achieve this target through various policies & initiatives. These are directed towards the automotive manufacturers & customers.

Manufacturers

Hybrid cars are the way of the future and manufacturers the world over have begun to realize it. The manufacturers try to align themselves with the mandate of the government and receive tax breaks, carbon credits etc. for producing eco-friendly vehicles. Manufacturers are now funding many R&D projects to develop hybrid technology even further.

Customer

Many governments across the world offer various incentives to people to buy hybrid or other eco-friendly cars. For instance, in Canada, there is a sales tax rebate on purchase of hybrid cars and in the Netherlands there is a discount on the vehicle registration tax. This project also intends to find out what factors influence a customer to purchase a hybrid car.

2.3 The Hybrid Car Ecosystem

The increasing danger and depletion of the environmental conditions has directly or indirectly forced government organisations world over to take corrective steps towards a healthier future outlook. This has given rise to government authorities taking initiatives towards promoting people at large looking at cleaner options available. This is where the Hybrid technology steps in. The government authorities give tax breaks and benefits such as free parking or discounts for lower carbon footprints on buying hybrid cars. Cars of lower compliance standards are heavily taxed to discourage buyers from buying such vehicles. Government authorities also make it mandatory for manufacturers to make cars adhering to environmental standards. Figure 1 below explains the relationship between the various components in the Hybrid Car ecosystem.

Environment

Government

Customers

Manufacturers

Hybrid Cars

Carbon Footprint Targets

Kyoto Protocol

Tax Breaks

Discounts

Free Parking

Carbon Credits

Mandate

Production

Research & Development

Fuel Efficient

Eco Friendly

Figure 1: Schematic representation of the Hybrid Car Ecosystem

3. LITERATURE REVIEW

3.1 Hybrid technology development so far

Hybrid car technology combines the advantages of a gasoline motor with those of an electric engine. Hybrid cars work on a small fuel-efficient gas engine and an electric motor that assists the car engine in accelerating. The power for electric motor comes from batteries that get recharged automatically while the car is running. (http://eartheasy.com/move_hybrid_cars.html). There are two types of gasoline-electric hybrid cars: parallel hybrid in which both gasoline engine and electric engine work together to push the car and series hybrids in which the gasoline engine may either power an electric motor or charge batteries which in turn will operate the motor. 

Ferdinand Porche made first battery operated car

1899

Gasoline-battery cars were developed.

1969

Audi developed a car in which a nickel-cadmium battery powered rear wheels and a diesel engine drove the front wheels.

1989

Toyota developed Prius which was first fully petrol-battery operated hybrid

1997

Going forward, concept of fuel cell will be implemented. A fuel cell will be hydrogen cell powered.

Future

A series hybrid vehicle mostly runs on a battery with a petrol or diesel generator that recharges the battery as and when the vehicle drives. These vehicles have an electric motor which has a very high power-to-weight ratio when compared to normal internal combustion engines. In a series hybrid vehicle, the engine provides power to the electric generator which in turn provides power to the electric motor to run, this electric motor then drives the wheels attached to it. This model was used by Ferdinand Porsche to build an early 20th century racing car. With the modern computer engine management systems, such optimizations have reached where a generator runs at such a speed to match the power required by the motor. In series hybrids, the electric motor can run directly on the electric power provided by a large battery or use the power generated by the generator or both, depending on the power requirement of the vehicle. As the engine is completely disconnected from the motor, it can run on a constant and more efficient rate regardless of the speed changes in the vehicle. Chevrolet Volt, Ford F-series, Volvo ReCharge are the examples of series hybrid vehicles ("Hybrid vehicle drivetrain", 2013).

In contrast to the series hybrids, parallel hybrid vehicles are driven by the transmission provided by both, the electric motor and the combustion engine. In such vehicles the combustion engine runs on the power provided by the gasoline and the motor runs on the power given to it by a large battery. Both of, engine and the electric motor, are connected to a common axel and provide transmission independently of each other ("Hybrid Electric vehicle", 2011).

Of the two, series hybrids and parallel hybrids, the series hybrids are favourites among various car manufactures across the world. With the growing concern about the environment, the Prius may not be the only vehicle in its segment. Honda has released a second-generation Insight, and Chevrolet has introduced the Volt. With the growth of hybrid technology, hybrid vehicles will eventually take a prime position in the auto market. (Andrew Meggison, www.gas2.org, August 2012)

Siemens has developed a series hybrid drive system called as Elfa. In Elfa system when the breaks are being applied, the electric motors start acting as generators and they feed the electricity back into the batteries. The power thus generated is then used to drive the vehicles. Many countries worldwide have started using Elfa system to run the buses. The coaches running on Elfa system consume one-third less diesel fuel than other conventional coaches (Eric Loveday, Feb 2011). Depending on the capacity of the batteries such vehicles can run for a few hundred meters or can go up to several kilometres. (Andrew Meggison, www.gas2.org, August 2012)

As the diesel engine does not provide any acceleration, vehicles running on Elfa system do not produce any noise. The vehicles operate at an economical engine speed, providing better fuel consumption. In normal circumstances such system provides savings of approximately 10,000 litres of diesel in a year. Buses running on Elfa system have been put to on road testing in number of countries worldwide. (www.engineeringnews.co.za; article: advances in hybrid vehicle technology)

3.2 Manufacturers Perspective

Rising prices of fuel and increasing awareness on environmental issues like global warming have turned attention towards creating lesser reliance on traditional fossil fuels. As a result "green" alternatives like hybrid vehicles are attracting more and more customers in the affluent countries (Auto Industry Outlook and Review - Yahoo! Finance., Feb 2013). The International Energy Agency Implementing Agreement on HEV technologies (IA-HEV) estimates that sales of Hybrid Vehicles have increased sharply from less than 70,000 in 2002 to about 2.5 million in 2011. This is incentivising major car manufacturers to further hybridize their car ranges. For instance in the U.S., the largest hybrid car market in the world accounting for 60-70% of global hybrid sales (Auto Industry Outlook and Review - Yahoo! Finance., Feb 2013), by the end of 2012 there were 20 car manufacturing companies selling 44 models of hybrid vehicles. Following figure shows the breakup of U.S hybrid vehicle sales by car manufacturers for the calendar year 2012.

2012 U.S. Hybrid vehicle sales by manufacturers. (Source: "December 2012 Dashboard - HybridCars.com")

Two major challenges car manufacturers face while developing hybrid vehicles are

Reliance on government support/policies – According to Booz & Company’s 2012 U.S. Automotive Industry Survey and Confidence Index, close to 60% of respondents see the alternative powertrain segment penetrating to almost 10% of the U.S market by 2020 with continued government support while half the respondents saw it remaining at 5% in the absence of government support.

Persistent high costs of building hybrid and electric vehicles – This is particularly caused due to components such as batteries and electric motors that have not benefitted from the economies of scale normally associated with the automobile sector. This has resulted in a number of major alliances between car manufacturers for the development of hybrid car components (Vinot, 2011, p. 3-4).

3.3 Brief overview of Hybrids in Australia

2012 saw a 57% growth in the hybrid sales in Australia. Apart from the business and the government departments, equal amount of hybrid vehicles were bought by private buyers. The major player that contributed to this growth was Toyota, selling over 72% of the total hybrid vehicles sold in Australia. Apart from Toyota, Lexus also expanded its sales of hybrid vehicles in the last year. Since the introduction of Toyota Prius in December, 2001, more than 40,000 hybrids have been sold in Australia ("Hybrid sales in Australia", January 2013).

Toyota Australia divisional manager, Peter McGregor in an interview for www.goauto.com.au admitted that the sales of hybrid cars in Australia had failed in the year 2011 majorly because of the non-existence of many options in this segment for the customers. The only player that existed in the market were Toyota and with only one product in this segment, Prius. In early 2012, major players in the automobile manufacturing like Honda, BMW, Porsche and Lexus entered the market of petrol-electric cars. With more options available in the market, the young generation of Australia became curious about these hybrid products and they came forward to understand the technology behind the hybrids and even many of Gen Y also started investing in them (site : www.goauto.com, article: Why Australians don’t like hybrids). Even Toyota came up with a new hybrid product in this segment, Camry Hybrid, which by reaching the sales figure of 7107 vehicles became Australia’s bestselling hybrid vehicle for the year 2012. (site: www.toyota.com.au, article: record hybrid sales for Toyota industry).

A recommendation of 32 measures has been made in Automotive Australia 2020- A technological roadmap. As a part of these recommendations there are also included schemes to tap into growing global Electric Vehicle (EV) as the automobile manufacturers wish to reduce their reliance on the fossil fuels. Some priority items mentioned in these recommendations are development for both domestic and export markets of super capacitors (an in-car energy storage unit), ), as well as electronics modules, electric motors, battery packs, more efficient and lightweight batteries that will help to produce more number of EVs.(http://news.drive.com.au, article: Australia plugs in to electrical vehicle charge)

3.4 Increasing acceptability of hybrid cars in Australia

Hybrid cars have now started to become a more accepted part of the Australian new-car space. According to the Herald Sun, sales of hybrid vehicles to private buyers in mid-2012 increased by 84 per cent which was nearly double the increase seen in the fleet market. In 2011 there were 8,820 hybrid sold in Australia, but of those only 2,212 were bought for private use. However by the end of June 2012 there were almost 1,950 hybrid cars bought for the private use (Martin, 2012).

The hybrid car segment has also increased substantially in size. Major carmakers like Nissan, Toyota and BMW have launched hybrid cars in the premium luxury car segment targeted at upmarket Australian customers. These include the Premium Infiniti M35h GT from Nissan, the Hybrid Lexus GS450h from Toyota and the BMW Active-Hybrid 5 (NEWTON, 2012). Even luxury carmaker Porsche now sells hybrid versions of its Cayenne SUV and Panamera luxury car ("Top of the classes", Money, 2011).

Hybrid cars are steadily making their presence felt in Australia’s car rental industry. Major car rental service providers in Australia like Hertz, Thrifty and Europcar are increasing their investments in hybrid vehicles and educating their customers on the economic and environmental benefits that hybrid cars provide (Adam, 2007).

Australian car insurance providers are also offering reduced premiums for low-emission cars like hybrids. In Western Australia, the RAC is offering up to 25 per cent off on comprehensive car insurance, an up to 2.5 per cent reduction in interest on a car loan and a free upgrade to a higher level of roadside assistance for cars emitting less than 150 grams of CO2/km. The NRMA offers a 10 per cent discount on comprehensive premiums for cars that use less than 5.5 litres per 100 km, while Victorian hybrid owners get a car registration discount of $100 (Martin, 2012)

3.5 Government attitude towards Hybrid Cars in Australia

The Australian government has recently launched the A New Car Plan for a Greener Future initiative. Through this initiative the government aims to provide a total assistance of $5.4 billion over the thirteen years between 2008/2009 and 2020/2021. Two major aims of this plan are to assist the automotive industry in Australia to prepare for a low-carbon future and to invest in the technologies of tomorrow. Of this $5.4 billion, $3 billion has already been committed towards various schemes and programs (Government initiatives and assistance, n.d.).

The Green Car Innovation Fund (GCIF) was one such program of $500 million. The aim of this program was to support the research, development and commercialization of technologies that significantly reduce greenhouse gas emissions and/or fuel consumption of passenger vehicles (Government initiatives and assistance, n.d.). In early 2011, this fund was closed as part of the Government’s saving measures towards rebuilding infrastructure damaged by floods in eastern Australia (Green Car Innovation Fund (GCIF), n.d.).

Through the GCIF, the Australian government has contributed more than $100 million towards:

Production of the Hybrid Camry in Australia

A$ 63 million towards development of the Toyota Global Engine Line for production of Hybrid engines in Australia

Production of 7 fully-electric proof-of-concept vehicles, to demonstrate the attractiveness and technical viability to consumers.

(AusIndustry, n.d.).

3.6 Future of hybrid technology

According to a 2011 forecast by Roland Berger Strategy Consultants, 10 per cent of new cars globally by 2025 will be electric, and the category that includes hybrids and plug-in hybrids will have grabbed 40 per cent of the market by then. Jim Motavalli (2012) argues that while this is a pretty optimistic forecast, there are good reasons for the same. People buying electric and plug-in hybrid cars will not only buy them for economic benefits, most will also be motivated by environmental concerns.

An International Energy Agency roadmap predicts a combined Electric and Plug-in Hybrid Vehicles sales share of almost 60 per cent of all Light Duty Passenger Vehicles worldwide by 2050. According to the same report, apart from contributing significantly to the reduction of greenhouse gas emissions, this increase in sales can deliver sizable benefits towards reduced urban area pollution and noise, and improved oil security. However policy support is critical in this regard, especially in ensuring cost-competitiveness and in providing sufficient recharging infrastructure. Also, continued research and development is needed to create efficient smart grids, to ensure adequate materials supply and to reduce battery costs (Source: Electric and Plug-In Hybrid Electric Vehicle Roadmap, IEA, June 2011).

Improvements in hybrid battery packs:

A hybrid car combines an internal (fuel-based) combustion engine with an electric motor. The electric motor is powered by a battery pack which stores and supplies energy to the motor. Thus a hybrid car’s battery pack is arguably one of its most important parts and its shortcomings are usually targeted by sceptics of hybrid technology. There are several ways in which hybrid battery packs are being improved, some of which are – cheaper replacement batteries, Lithium-Ion batteries for cars, new lead-acid battery advancements, extended battery life and lighter-weight batteries (Source: HowStuffWorks).

3.7 Alternate Technologies

Although plug-in cars and hybrids have placed themselves high above in the sustainability market for eco-friendly cars, researchers have also been working on the development of running vehicles on the hydrogen fuel cells. Fuel-cell systems generate power from hydrogen that is passing through polymer membranes which is sandwiched between two plates that could be made of either metal or thermoset plastics. (www.plasticsnews.com, article: Car manufactures)

Development of Hydrogen – based vehicles:

Hydrogen-fuelled internal combustible engines or fuel-cell based electric motors have emerged as viable alternatives in car fuel technologies for the near future, as evidenced by the investments being made by carmakers in these technologies. Fuel cell-based cars are reported to drastically reduce pollution as their only emissions are water vapours. Hydrogen filling tanks could also be placed at existing petrol and diesel fuel stations and thereby do not require the additional infrastructure that is needed for plug-in electric cars and hybrids (Miel, R. (2012). Move over plug-ins, hybrids. Tire Business, 29(25), 0010)..

Liquid Nitrogen vehicles:

These are similar in many ways to electric vehicles, except that liquid Nitrogen is used to store energy rather than batteries. Although they have many potential advantages like low cost fuel, lower maintenance costs, less pollution and so on, vehicles propelled by liquid Nitrogen have been demonstrated but not yet proved viable enough to be used commercially (source: Wikipedia)

4. METHODOLOGY

The primary objective of this project is to better understand what developments have been made until now with regards to hybrids cars and keeping this in mind, the project has been designed to be exploratory in nature rather than fact finding.

To begin the research, we initially defined the components that the research would cover and based on this, developed a list of research areas that we would explore. The project has been divided into four major categories:

The history and evolution of Hybrid cars

Developments with regard to hybrid technology

Government attitudes towards Hybrids

Hybrid cars in Australia

We then explored the information available about each of these areas through various secondary sources of information. The qualitative data for this project has primarily been sourced through:

Industry Associations (Electric Drive Transport Association)

Manufacturer Websites (Toyota, Honda)

Major business publications (Mckinsey Quarterly, Booz & Co)

Industry Forums

Journals

Newspapers

For data on hybrid car sales & cost benefits, we have extracted data from Industry Associations and Automotive research firms.

The information gathered from this research has been detailed in the Literature Review section of the report. We have developed our Data Analysis to highlight the key findings from the research. The conclusion of the report provides our inferences from these findings.

The report tracks the development of Hybrid technology, beginning with the first electric vehicle in 1899 until recent developments in Australia in 2013. In order to compare the maturity of the Australian hybrid car market, we have also looked at the market for hybrids in USA and technology trends globally.

All references included in this report have been done according to APA standard.

5. DATA ANALYSIS

The hybrid cars that are available in the market today are gasoline-electric based systems and the two main types are Series Hybrids & Parallel Hybrids. Amongst the two, series hybrids are the more popular variety and most of the vehicles available in the market are of this type. This technology has been developed further for use in buses by companies like Siemens. This goes to show that the potential for hybrid technology is taking it beyond conventional boundaries.

Manufacturers are also keenly pursuing the development of their hybrid range of cars with manufacturers in USA currently producing about 44 different models of Hybrid vehicles. Reducing the cost of producing hybrid cars is going to be the major challenge for manufacturers in the years to come as the industry is yet to achieve economies of scale. However, with increasing acceptability of hybrids globally, this situation should improve significantly in the near future.

The major drawback with Hybrid cars at present is the high upfront cost, though the car provides long term benefits in terms of fuel savings. In most cases, the primary drawback is that people are not aware of the time frame in which the Hybrid cars would break even with traditional petrol based cars. The comparison between 5 different hybrid cars in USA has been provided in Table A.1 (Appendix). Each car has been compared to a similar petrol based car. What is evident from the data is that the breakeven of hybrid cars varies largely from car to car and can vary from anywhere between 3 years to 19 years. (Source: EVsRoll)

Though the introduction of Hybrids into the Australian market has happened much later than in developed markets like USA and Europe, the demand for hybrids in the country has seen robust growth in the past few years. With Toyota having set up a plant in Australia now to manufacture hybrid vehicles, more manufacturers are likely to follow to capture this market.

Hybrid cars are presently being used in non-traditional areas such as car rentals even. From the perception of being a niche car, hybrids are slowly making the transition into a common man’s car. The Australian government is also doing its bit to encourage manufacturing and acceptance of hybrid cars in the country through various schemes like the 13-year $5.4 billion A New Car Plan for a Greener Future initiative. This augurs very well for the future of hybrids in Australia.

 

Although Hybrid car sales are forecasted to escalate to more than 50% of all Light Duty Passenger Vehicles sales worldwide in the next 20-30 years, this can only happen through continued policy support and constant investment in research and development to create efficient smart grids, to ensure adequate materials supply and to reduce battery costs.

 

While plug-in and hybrid cars are the current trendsetters in the eco-friendly car market, recent developments have increasingly focussed on the use of Hydrogen fuel-cells to power vehicles. Fuel cell-based cars are reported to drastically reduce pollution as their only emissions are water vapours. Although vehicles propelled by Liquid Nitrogen have many potential environmental and cost advantages, this technology has been demonstrated but not yet proved viable enough to be used commercially.

6. CONCLUSION

Hybrids are rightfully touted as the future of the automobile industry and are here to stay. Cars the world over are a major contributor to the carbon footprint and hybrid technology is the best alternative we have at present. A complete change from traditional gasoline cars, while a tempting thought, is very hard to achieve as any change takes time. Hybrids, which cleverly combine traditional gasoline engines with electric motors, provide the right balance.

Hybrids provide a variety of advantages, not just to consumers but also to governments and automotive manufacturers. While it helps governments meet their environmental targets, it helps manufacturers increase their margins since they are expensive cars. The manufacturers also realize that the future lies with hybrid vehicles and have begun investing heavily in this segment. The consumers have also responded to hybrids very positively and are using hybrids for a variety of purposes including rentals.

The hybrid cars available at present are not perfect and do come with their set of challenges. With high costs, lack of availability of charging centres and servicing constraints, manufacturers and governments have their task cut out. These factors will improve in the coming years with manufacturers and governments focussing on addressing these issues.

Australia as a country has taken to Hybrids very well in the last couple of years and this trend is expected to continue. With more investment in this sector from the auto majors and support from the government, this segment is likely to emerge as a strong competitor to traditional gasoline based cars.

The future for the hybrids market is very bright with projections of 40% market share globally by 2025 and 60% by 2050. While the segment has the potential to achieve these targets, they will need extensive support from governments, manufacturer and increased research & development. Hybrids will also face competition from alternate technologies such as Hydrogen cell and liquid nitrogen based cars. Concept cars of both these technologies have been showcased by manufacturers and if the hybrid manufacturers don’t find a solution to their issues quickly, they have the potential of being overtaken by these technologies.

This study has been designed to be a qualitative review of the current state of the hybrid industry. Future research could include looking at an empirical analysis of what drives the industry.

7. BIBLIOGRAPHY

Adam, C. (2007). Hertz eyes Prius. Travel Weekly Australia, (67), 4.

Australia Launches First Hybrid Engine Plant Facility in Melbourne. (2012, December 6). International Business Times.

NEWTON, B. (2012). Upmarket hybrids. Money (14446219), (150), 29.

Top of the classes. (2011). Money (14446219), (141), 122-124.

Miel, R. (2012). Move over plug-ins, hybrids. Tire Business, 29(25), 0010.

John Fuller, 5 Ways Hybrid Battery Packs are Being Improved. Retrieved January 28, 2013, from HowStuffWorks (http://auto.howstuffworks.com/fuel-efficiency/hybrid-technology/5-hybrid-battery-pack-improvements.htm)

Liquid nitrogen vehicle, Retrieved January 28, 2013, from Wikipedia (http://en.wikipedia.org/wiki/Liquid_nitrogen_vehicle)

Martin, S. (2012, August 02). Cool and green hybrid car sales surge to Australian record. Herald Sun. Retrieved from HeraldSun.com.au

(http://www.heraldsun.com.au/business/cool-and-green-hybrid-car-sales-surge-to-australian-record/story-fn7j19iv-1226441599395)

A New Car Plan for a Greener Future:

http://www.innovation.gov.au/Industry/Automotive/InitiativesandAssistance/Pages/default.aspx

Green Car Innovation Fund (GCIF):

http://www.ausindustry.gov.au/programs/manufacturing/gcif/Pages/default.aspx

GCIF Grants:

http://www.ausindustry.gov.au/programs/manufacturing/gcif/Documents/GCIF-GrantAgreementsExecuted.pdf

Motavalli, J. (2012). The Road Ahead for Gasoline-Free Cars. Futurist, 46(2), 6-7.

Kalmbach, R., Bernhart, W., Kleimann, P. G. and Hoffman, M. (2011). Automotive landscape 2025: opportunities and challenges ahead, Roland Berger.

News. (n.d.). How Do Hybrid Cars Work? - ABC News. ABCNews.com - Breaking News, Latest News & Top Video News - ABC News. Retrieved February 8, 2013, from http://abcnews.go.com/Technology/Hybrid/story?id=97518&page=1

Evans, P. (n.d.). Formula One KERS explained. Gizmag | New and Emerging Technology News. Retrieved February 8, 2013, from http://www.gizmag.com/formula-one-kers/11324/

The Australian. (n.d.). | The Australian. Retrieved February 9, 2013, from http://www.theaustralian.com.au/news/nation/buyers-browned-off-with-hybrid-green-cars/story-e6frg6nf-1225890001019

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