A new study suggests that by the year 2020 all new cars will be hybrids. Can there be such a wholesale shift in the automotive ecosystem in just 12 years? According to IBM’s Institute for Business Values, the car industry “is in the midst of significant change, with increasing challenges in consumer demands, technology development, globalization, integration and collaboration,” and, to survive, car-makers must consider environmental responsibility and fuel efficiency as increasingly vital components of consumer interest.
It’s been a rough year for the car business. Americans will buy fewer cars this year than any year since the early 1990s. US automakers in particular are sputtering. When Ford announced its second quarter financial results, they turned out to be the worst-ever recorded by the company, an $8.7 billion loss. But of the few success stories in the car industry in recent years, the hybrid is chief among them. The writing has been on the wall for years, certainly going back to 2003, when Toyota overtook Chrysler for the third spot of top automakers in the United States. Carried by the overwhelming success of the Prius, which in many ways single-handedly demonstrated the viability of the hybrid in today’s marketplace, Toyota has continued to lead the charge. Last year, the Japanese automaker announced that 100% of its fleet would be hybrid by 2020. So can the other car-makers keep up? Reluctant new-comers to the green revolution, the so-called ‘Big Three,’ GM, Ford and Chrysler are getting into the game. As summer ends, gas price may be coming down, but the trend seems to be leading inexorably towards hybrid technology. Tax incentives and an unprecedented dip in the sales of gas guzzlers has inspired a frenzy of activity in the development of fuel-efficient vehicles. In 2007, Congress passed new fuel economy standards, the first in 30 years, another reason IBM’s prediction might actually be proven correct. According to the new standards, automakers’ fleets must average 35 mph by 2020. We have a feeling the Big Three is starting to get it, but whether they’ll be around in 2020 remains to be seen.
