By Keith Reid
NACS conducted a survey that found where alternative-fuel vehicles are concerned, the alternatives people tend to want seem to be how much horsepower or cargo space can I get for the lowest price in a vehicle burning fossil fuels. OK, the horsepower and cargo space observations are editorially mine. But I think it’s a fair assumption that when consumers think of alternative vehicles, they think of small, underpowered alternatives to what they would rather drive if the fossil fuels used to power them are cheap enough.
Advances in technology have made that not entirely true—many crossovers are using small, turbocharged four cylinders to replace comparable v-6 engines, for example. Clean diesels are hopefully still poised to take a run at the U.S. market. And the alternatives themselves have come a long way. Biodiesel and its heating oil cousin Bioheat make sense in many applications, and can make fuel marketers money. The same can hold true, specifically in the corn belt, with higher-blend ethanol. Electric cars and hybrids appeal to certain demographics. As an online magazine, we’re open to anything that makes sense for our industry and its members.
From NACS: Consumers are much less likely to consider a non-gasoline powered vehicle as gas prices continue to decline, according to a new consumer survey examining preferences related to alternative vehicles.
Four in five consumers (80%) considering an alternative fuel vehicle say that the primary reason is to save money on fuel. However, as gas prices decline, so does interest in these alternative vehicles. Each 10-cent drop in gas prices corresponds to a 1% decrease in the percentage of consumers considering alternative vehicles: 78% would consider a non-gas powered vehicle if gas were $5 a gallon, compared to 68% if gas were $4 and 56% if gas were $3, according to an alternative fuel vehicles tracking study commissioned by the National Association of Convenience Stores (NACS).
Nearly three out of four consumers (72%) considering an alternative vehicle would consider a hybrid, followed by flex fuel vehicles (42%), all electric (34%), and hydrogen fuel cell and diesel fuel (22% each).
Consumer interest in alternative vehicles has fallen sharply since April 2014 when gas prices were 90 cents per gallon more than today. Consumer interest has particularly declined for all-electric vehicles, with 34% indicating interest, compared to 55% in April. Women are far less likely to consider an all-electric vehicle than men (27% vs. 40%), likely because of range-anxiety concerns.
Besides seeking out fuel savings, consumers identified a number of other factors that could incent them to purchase alternative-fuel vehicles: 51% of consumers would consider an alternative vehicle to protect the environment, 45% would to reduce American dependence on foreign oil, 42% would to reduce their carbon footprint and 41% would to increase their driving range.
While the survey results are not encouraging to the alternative fueling industry, there may be some opportunities to expand sales. Older consumers, those over age 50, are most likely to consider an alternative fuel vehicle as a means of reducing American dependence on foreign oil: 59% cited this reason, compared to 35% of those ages 18-34. Meanwhile, younger consumers are more interested in how the vehicles fit their lifestyle: 22% cited that reason, compared to only 8% of those over age 50.
I was born in 1965. Although I didn’t start driving until about 1981, it was hard to miss the gas lines and the ever shrinking automobile. From the muscle cars and behemoths that populated the roads when I was driving a big wheel, to the (at the time) tinny little Japaneses rust boxes and their even more marginal Detroit copies I had to choose from when looking for my first car—the shift was impossible to miss. Muscle cars without muscle. Micro station wagons and the birth of the minivan, that truly were mini. Speedometers capped at 85 miles an hour to discourage a lead foot.
Of course, as soon as oil prices plummeted in the 1990s era of $10 per barrel oil, the muscle cars and behemoths came back with a vengeance. Though, there was still plenty of room for more economical cars for those who appreciated greater practicality and some extra savings.
If high prices force other choices on us, then we grumble and suck it up. But given a free choice—and reasonable fuel prices—for many Americans you can’t make a big enough Hummer. A hybrid or fuel cell Hummer or one one powered on ethanol or biodiesel is great, as long as it (and the energy source) doesn’t come at a premium price compared to the conventional gasoline version. History and the NACS survey clearly suggests this is the case.
As to the ancillary support drivers for these alternatives, Joe Petrowski made an argument in a column at this site that finally made me a convert to the concept of reducing the dependence on foreign oil (which has now shattered like shale under hydraulic fracturing), at least in part. But, that is mainly because of where we are at today from our abundant natural energy supplies now being developed. When we imported significant quantities of oil, a few percentage points of offset really didn’t matter all that much. Now, those few percentage points can actually tip the scales and create wonderful things like disarray in OPEC.
As for being green—various studies suggest that people turn such needs into wants, or would be nice, in the case of a painful trade off. The observation that so many ecologically aware celebrities refuse to give up their private jets, palatial mansions and luxury yacht vacations illustrates this at it’s comical best. Not all people, of course. Some “deep greens” like “Ed” Begley, Jr. will pay a premium (in his case though deprivation) to be Eco-conscious, while any dozen Leonardo DiCaprios live life personally large and phone the Eco part in.
Some alternatives hold up better in a natural marketplace on the cost vs. benefit calculation, and others do not. Subsidizing alternatives from windmills to fuels is becoming far less certain each year. Those in Washington that are considering ways to make gas expensive again to prop up alternatives or to help fill government coffers, should keep in mind that America has far more DiCaprios than Begleys, even if the best they can do is a trimmed out SUV instead of a private jet.
