Hybrid cars: Does environment or price matter most?

Hybrid cars are generating much of the buzz, but cost still matters most to car buyers. So hybrid cars have to compete with traditional high-mileage cars.

Mary Altaffer/AP
A Chevy Volt and a 240 charging station are on display at the 2011 New York International Auto Show April 21, 2011 in New York. Hybrid cars are attractive to car buyers, but costs matter most, according to a new survey.

By Phil LeBeau, CNBC Correspondent

With electric cars and plug-in hybrid cars generating more buzz than ever before, a new study by J.D. Power drives home a bit of reality about the green wave rolling into showrooms.

J.D. Power surveyed more than 4,000 potential car buyers and what did they find: For most consumers, cost matters more than the environment.

When I read this I chuckled because it's what I've heard from executive after executive in the auto industry. And yes, that includes executives working on electric cars.

Skeptics will look at this and say, "What? Are you saying the zero or very low emissions coming from EV's and plug-in hybrids don't matter to car buyers?" Of course not. The fact these cars run cleaner than internal combustion cars is an attractive feature, but in general it won't be enough to drive most potential car buyers to pick a Chevy Volt or Nissan LEAF over a Chevy Cruze or Nissan Altima.

At the end of the day, most people want the best mileage/range we can get from a car, regardless of what powers it.

Take two models with comparable features, styling and pricing. If the an internal combustion model gets 50 miles per gallon, most of us will pick it over an EV or plug-in that gets the equivalent of 35 MPG, and vice versa.

If the expected mileage between both is closer or comparable, then other factors (like the emissions) play a bigger role. As one auto industry veteran told me at the New York Auto Show, "If a car running on chicken fat could get 100 miles per gallon, we'd all be clamoring for chicken fat."

This explains why J.D. Power forecasts hybrid and EV sales will make up less than 10% of all U.S. auto sales through 2016. Not only will their sales be limited by the relatively limited supply of "green" models, but also because the internal combustion engine is becoming more refined, more efficient, and yes more capable to power us farther on a gallon of gas.

Look at BMW. It's bringing back a four-cylinder engine, this time capable of delivering 240 horsepower. And we're far from seeing how far the auto industry can push the internal combustion engine. By 2016 we could see i-c engines that give us even greater mileage and even more power.

America has primarily driven gas powered cars for the last century. We are creatures of habit, slow to change. And whatever power train gives us the most bang (or miles) for our buck, we'll take it.

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