Study Says U.S. Diesel Sales Set To Outstrip Hybrid Sales
May 24, 2007

A research report released today shows U.S. sales of both diesels and hybrids will grow significantly in the next five years but diesels will outpace hybrids.

The report from UBS and Ricardo predicts diesel and hybrid sales will hit 2.7 million a year by 2012, or about 15 percent of the U.S. light vehicle market. Diesel will outstrip gasoline hybrids by 1.5 million versus 1.2 million.

Increased demand for diesels and hybrids will be driven by U.S. regulators looking to revise fuel economy standards amid concerns for energy security and greenhouse gas emissions. Diesels will gain a preference because of its cost advantage, the report concludes.

Currently, hybrids appear the preferred choice of Americans, whereas diesels dominate in Europe.

Automakers plan to launch numerous hybrids in the U.S. the next few years. In fact, The April issue of Ward's AutoWorld reported that U.S. buyers could have at least 25 hybrid-electric vehicles to choose from by the 2009 model year, barring any cancellations of programs. The magazine questioned whether that was too many hybrids for the market.

The UBS/Ricardo report notes hybrid technology faces substantial manufacturing cost penalties, which are unlikely to be eroded even in mass production. The report concludes diesel has a clear cost advantage over hybrid, even when fitted with the type of complex exhaust aftertreatment technologies necessary to meet future, more stringent emissions regulations
 
UBS highlights that European automakers and a number of global suppliers look to be positioned to benefit from the diesel trend.

Posted by Michelle Krebs at 12:03 PM under Analysis , Technology | Comments (2) | digg this | Seed Newsvine