Appeal for Alternative Fuel Luxury Cars Declining: Study

A new study suggests that luxury car buyers could be losing interest in alternative fuel vehicles.

The study is based on data collected semi-annually by Phoenix Marketing International and shows a four percent decline in the number of luxury car buyers who would consider buying an alternative fuel vehicle. The latest information was collected between January and July, and is compared to data gathered in the second half of last year. The study also found that the number of respondents who said they would not consider an alternative fuel car increased three percent compared to a year ago.

But the alternative fuel luxury market is a small one.

“For someone able and willing to spend more on a luxury vehicle, the decision might be based less on the potential for savings and more on personal preference to be ‘green’ or to drive something that represents the state of the art in automotive technology,” Phoenix analyst Kevin Severance said.

BMW already marketed a limited number of electric 1 Series sedans in California, but Tesla is the only company currently making a big push for electric luxury cars. There are roughly 11,000 Model S sedans on roads in North America, which is impressive for such a new company but tiny compared to the overall market. Tesla CEO Elon Musk says the company is on track to deliver 21,000 Model S sedans by the end of the year.

Soon, BMW will launch its i3, but that will also be a sliver of the automaker’s overall sales.

There wasn’t any conclusion about why luxury buyers might be shying away from alternative fuel vehicles, but it points to an improving economy and premium customer preference for performance capability.

While the performance problem pertains to many alternative fuel products, that very issue is what some industry analysts see as one of Tesla’s biggest edges.

After the i3, which is marketed as a city car, the company will sell its i8, a plug-in hybrid sports car. While it doesn’t venture into the same all-electric territory as Tesla, it will probably contend with similarly niche status.

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