The first mass-market plug-in hybrids roll into showrooms late next year, and a new study suggests they must be affordable if automakers expect them to sell.

The survey, released today by the University of Michigan, shows there is "widespread" consumer interest in the vehicles, but the potential purchase price plays a much bigger role in predicting the technology's success than any environmental or economic benefits it may promise.

In other words, people will look at the bottom line. And the bottom line is plug-in hybrids cannot cost significantly more than conventional automobiles if they are to succeed in the marketplace. It seems intuitive, and we've heard the argument before about electric vehicles. But it takes on added importance because big automakers like General Motors, Ford and Toyota – and upstarts like Fisker Automotive – promise to deliver cars with cords beginning late next year. It also could have public policy implications because President Obama wants to see one million plug-in cars by 2015 and the government already offers a $7,500 tax credit to those who buy them.

"The data provide strong evidence that a combination of economic and social incentives may be most effective in successfully introducing these vehicles," said Richard Curtin, an economist and director of the Reuters/University of Michigan Surveys of Consumers.

The survey found almost half of respondents said they might buy a plug-in hybrid at some point. But the figure dropped precipitously as the price of the car climbed. What's more, the survey found the environmental benefits of such vehicles plays a much smaller role in consumer attitudes than expected, suggesting there may need to be some serious public education about the technology's advantages.

The study was released today at The Business of Plugging In, a plug-in hybrid and electric vehicle conference in Detroit. Researchers surveyed "a nationally representative sample" of 2,513 adults between July and November 2008.

Given no estimates of the potential cost and fuel saving estimate of the cars, 42 percent said there was "at least some chance" they would buy a plug-in hybrid "at some point in the future." The researchers then asked respondents to rate the likelihood they'd buy such a vehicle if they assume they would save 75 percent in fuel costs compared to a conventional gasoline-powered automobile. That's where things got interesting.

With each successive doubling in the premium consumers might pay for a plug-in hybrid, the likelihood they'd buy one fell 16 percentage points. Forty-six percent said there was "some chance" they would buy such a car that cost $2,500 more than a conventional car. That fell to 30 percent when the premium rose to $5,000 and to just 14 percent if a plug-in hybrid were to cost $10,000 more than a conventional car.

"Indeed, 56 percent of all consumers responded that there was no chance that they would purchase a PHEV at the top premium," Curtin said. "The proportion indicating a zero probability of purchase moves from one in four at $2,500 to one in three at $5,000 to more than one in two at an added cost of $10,000."

According to the Federal Trade Commission, the average new car sold in the United States costs $28,400. General Motors hasn't said what the Chevrolet Volt will cost when it goes into production at the end of next year, but it is believed to be trying to keep the cost below $40,000. Toyota hasn't said what the plug-in Prius might go for when it appears in 2012, but the 2010 Prius starts at $22,400. Fisker Automotive is offering the super-luxe Karma at $89,900 and plans to introduce a more "affordable" plug-in hybrid sedan for $39,900 (after the federal tax credit) as early as 2012.

Don't look to early adopters to pick up the slack until the costs of the technology comes down.

"Those who said they were 100 percent certain they would buy a PHEV reached a high of just 10 percent for the lowest added cost and fell to just one percent at the highest added cost," Curtin said.

As to why people would by a plug-in hybrid, half of the respondents said showing a commitment to the environment was "very important" to them. Yet most people – 54 percent – said reducing our dependence on foreign oil was the single biggest advantage of the cars. Not quite a third of them thought saving money on fuel was the main advantage, even though gasoline was going for an average of $4.28 a gallon when the survey was conducted.

Advocates of the technology often tout its environmental benefits through reduced emissions, specifically carbon dioxide. Although 70 percent of our electricity is generated from fossil fuels, research by the Electric Power Research Institute and the National Resources Defense Council shows plug-ins and EVs could cut greenhouse gas emissions by more than 450 million metric tons annually by 2050. That’s the equivalent of eliminating 82.5 million gasoline vehicles — about a third of the number currently on the road in America.

Yet just 15 percent of all consumers cited reduced emissions as the main advantage to plug-in hybrids, Curtin said.

"Consumer attitudes toward the environment are less compelling than economic criteria in explaining hybrid purchase probabilities," he said. "Presumably, if PHEVs are priced so that consumers can recoup their initial investments over a reasonable time period, consumers should find ample economic justification for their purchase. The critical role of environmental and other non-economic attitudes may be to provide the initial burst of interest and sales to propel the appeal of PHEVs to the mass market."

The survey also considered how demographic factors such as age, vehicle usage patterns and access to recharging opportunities might impact PHEV purchasing. You can see the full report here.

Photo: A Prius plug-in hybrid prototype at the 2008 Sustainable Mobility Seminar in Portland, Oregon.

Toyota.

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