The Great Hybrid Makeover
Until recently, hybrid cars weren’t exactly seen as sexy vehicles. Chic wasn’t really the point or part of the package. Perhaps the marketing demographics that targeted eco-conscious consumers and luxury brand consumers were separated by too much distance.
But many higher-end automotive brands are trying to close that gap with new premium hybrid models. Bentley is coming out with a luxury hybrid model based on its Mulsanne luxury sedan. Tata Motor’s (NYSE: TTM) Jaguar Land Rover recently made a hybrid diesel Range Rover, which it plans to introduce near the end of the year. Audi (OTC: AUDVF), Nissan Motor Co.’s (OTC: NSANY) Infiniti, BMW (BMW.F), Daimler AG’s (OTC: DDAIF) Mercedes-Benz, and Toyota Motor’s (NYSE: TM) Lexus also have their own new hybrid models.
And when you factor in the growth of car charging networks and global manufacturing partnerships, this hybrid trend comes with investment ventures of all makes and models.
Competitors Start Their Eco-Engines
Back in 2003, General Motors Company (NYSE: GM) introduced the concept of the hybrid diesel engine to the market. But it was Toyota that paved the way for hybrid mass production with the Prius. Today, the Prius is the world's top selling hybrid electric vehicle, with cumulative global sales of more than 3 million units as of June 2013. Toyota's luxury division, Lexus, now offers the hybrid system on its ES sedan. Despite Toyota’s pioneering lead, GM’s 2014 luxury plug-in hybrid, the Cadillac ELR, is poised to answer the challenge.
Some luxury hybrids are even getting competitive in pricing. Lincoln offers a dressy midsize sedan option in its 2013 MKZ model, unique because it starts at a modest $35,925 – the same as its non-hybrid counterpart. Along the same lines, hybrid virtuoso Honda (NYSE: HMC) is releasing Acura’s first gas-electric model, the ILX. The compact Acura ILX starts at a mere $28,900.
Chinese factories have ramped up manufacturing of parts for all the new hybrids that will soon influx the market. Bids for cornering the Chinese market have come from companies like Toyota, Honda, GM, Audi and even Lamborghini.
But BMW sits pretty on the global stage as the leader in overall luxury auto sales, boosted by a recent 11% surge in profit with aid from strong sales in the Chinese market. BMW’s ActiveHybrid 3 is a powerful performer and certainly helped BMW report a net profit of $2.09 billion in the first quarter.
Audi, the No. 2 premium brand by volume worldwide after BMW, has the hybrid e-Tron now. By the year 2020 there will be an e-Tron version of every model in the Audi portfolio. Audi’s first quarter sales were up 12%, although net profits have not been shared yet.
In third place for global luxury auto sales is Daimler AG. And it has its sights aimed at the top. In the first quarter, sales of Mercedes-Benz cars rose 14% to 389,476 vehicles, a bump fueled by a 52% increase in Chinese demand. In April alone, Mercedes sold 133,077 vehicles, up 14%.
Stateside Expansion of Charging Stations
There you are in your sleek, fuel-efficient wonder-auto, sipping your latte, when you realize you need a charge. How far do you have to go to find a station, and what’s the quickest way to find one?
The West Coast showed up first to the electric vehicle (EV) charging game with contenders like NRG Energy’s (NYSE: NRG) eVgo charging network, but the Northeast is now seeing the profit potential. Last month, the Pennsylvania Turnpike Commission announced a partnership with the Department of Environmental Protection and Car Charging Group Inc. (CarCharging) (OTCQB: CCGI), the largest owner and operator of electric vehicle charging services. Charging stations will be installed in Pennsylvania service plazas by CarCharging with the help of a $1 million grant from the state Department of Environmental Protection. To initiate and pay for a charging session, EV drivers can request access via Blink’s InCard (a company they’ve recently acquired), or direct payment via credit card.
Electric vehicle software like the smartphone app PlugShare, which is owned by Recargo, is getting in on the action by helping people locate charge stations on the go.
It’s a relatively new game with loads of growth potential, so hang on tight and keep your eyes open for inventive road warriors looking to cash in.