This case study examines hybrid consumer vehicles through the lens of the technology S-curve, using U.S. hybrid car sales data from 1999 to 2009 to plot adoption rates over time. The paper identifies natural technological limits affecting hybrid vehicles — including battery weight, energy efficiency, and cultural resistance rooted in political identity — and projects sales trends through 2019. It evaluates whether hybrid technology is itself disruptive or merely incremental, and argues that battery electric vehicles (BEVs) represent the most likely disruption that will eventually overtake the hybrid market. The paper also profiles likely future hybrid and BEV customer demographics and considers how consumer characteristics will evolve as the technology matures.
For this case study, the hybrid car has been selected as the technology of interest. Hybrid cars have been a steady presence in the consumer auto market since the early 2000s. Toyota's Prius is the best-known example and holds the largest market share, which was set to expand into other market niches with the development of subcompact and hatch/crossover versions of the Prius. Although Toyota has made sweeping claims about the amount of research money it spends — specifically on safety research — the company does not report how much of its R&D budget is devoted to innovation versus safety and design refinements.
A thorough analysis by Booz Allen & Hamilton on the relationship between R&D spending and market performance shows that gross measures of research spending have no predictive power over market share or sales (Jaruzelski, Dehoff, & Bordia, 2004). Especially in the automotive industry, companies above the median in sales volume spend close to the same percentage of their budget on research as those below the median. So in terms of effort indicators, research dollars or person-hours spent on development appear to be a poor metric to plot against sales in order to observe the customary S-curve of technological performance. Instead, this paper plots hybrid car adoption rates against time — representing the car companies' commitment to sustaining a good idea even when the market seemed ready to abandon the hybrid vehicle.
Hybrid car sales for the years 1999–2009 are examined on a per-year basis. Data are drawn from the U.S. Department of Energy's Monthly Energy Review (2010). For the years 1999–2004, the number of hybrid vehicles barely made a dent in overall sales volume — public demand had not yet reached a noticeable level, and the popularization of "green living" was still a few years away. Assuming that hybrid car sales will follow the S-curve, figures can be projected through 2019, by which point sales should begin to dwindle owing to the emergence of a new technology.
Mathematically, however, the data still fall on the locally linear rise in the middle of the S-curve. This means that the key disruption, or turning point, has not yet occurred, and it cannot be predicted when it will arrive if sales figures remain flat for the next several years. No technology exists in a vacuum, and it is certainly possible that rising gas prices combined with the further mainstreaming of the green lifestyle could make the growth curve even steeper.
The auto industry is subject to several natural technological limits: material resource availability, consumer demand, and energy efficiency. The energy efficiency of the battery systems that popular hybrid engines require did not become viable in the consumer market until the late 1990s. Many hybrid or electric vehicles are still hampered by the weight and size of the batteries they must carry in order to provide adequate power. For example, the Tesla Roadster's battery pack weighs 1,000 lbs and requires 3.5 hours for a full recharge (Elfalan, 2008). Hybrid vehicles "solve" the problem of weighty batteries and long charge times by providing a gas engine to supplement the batteries — although in most driving conditions the batteries end up supplementing the gas engine — and by using a regenerative braking system that charges the batteries through auxiliary capacitors.
Consumer demand is a natural limit, especially given the ideological divide in the United States, the single country in which the majority of cars are purchased. Political and cultural differences between residents of more conservative and more progressive regions are reflected in behavioral differences, including purchasing decisions. Because a large part of the hybrid car's appeal lies in its partial independence from nonrenewable fossil fuels — and since fossil fuels are widely cited as a major contributor to human-caused climate change — hybrid cars are a natural match for politically progressive consumers. However, the technology's identification with scientific claims about global warming may limit its ability to achieve market penetration in more conservative regions of the U.S., where skepticism about global warming's existence or human origin is more prevalent (Kanazawa, 2010).
The issue of material resource availability applies to both petroleum and battery materials, though much more acutely to petroleum. The easy availability of refined oil for transportation will slow down at some point in the near future. When that happens, it will represent a major disruption affecting both traditional auto manufacturers and, to a lesser extent, those who have invested heavily in hybrid and electric vehicles.
"BEVs identified as the likely disruptive successor technology"
"Who will switch from hybrids to electric vehicles"
"Age and lifestyle trends shaping future hybrid buyers"
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