Ford introduced the classic Mustang in the year 1964 as a cool car for the young Americans of the 60s. It hit all the right notes and became the first nameplate ever in the US to sell more than a million units in just two years. Its low fuel efficiency did not matter to the baby boomer generation as the fuel prices were low and America just wanted to have a good time.
However, things have changed a lot in the last 50 years since the launch of Mustang. Now fuel efficiency matters a lot to buyers, especially with the oil price hitting the $4 per gallon mark. The gas guzzling vehicles of the past few decades have generated too much pollution and congestion. Also, with the rise of emerging markets, such as India and China, the demand is set to rise further.
The emerging countries are already taking steps to tackle the high air pollution in their cities. It is very difficult to get a registration number for a new car in some Chinese cities and buyers sometimes have to wait as long as two years to register their vehicles. Also, government in China is offering lots of subsidies to buyers of electric vehicles or low emission vehicles.
However, things are not really bright on the electric car front. In the year gone by, many electric carmakers have filed for bankruptcy either due to management issues or technological challenges. Also, many automakers are selling the electric cars at a loss to meet the zero emission quota imposed by some of the states. The only bright spot has been the rise of Tesla Motors which is now running profitably and has also returned the loans taken from the government. It also has a long waiting list for its upcoming launches.
The electric vehicles or zero emission vehicles still have a lot of technological challenges to overcome. Consumers are not really interested in buying gas-guzzling vehicles due to high fuel costs as well as due to environmental concerns. While the sales of hybrid vehicles has stagnated in the recent years, the sales of plug in electric vehicles has been growing at a steady pace and has already surpassed the growth rate of hybrids.
Impact of China
The annual domestic demand of cars in China currently stands at approximately 22 million units. However, the number is expected to rise to 30 million units by the year 2020. Even though China does not have a major auto export industry, experts are of the opinion that the car market in China will shape the global auto market in the future. It is expected that the auto industry in China will consolidate in the near future and will lead the world.
As mentioned above, the govt. in China is already taking steps to curb the demand of gas guzzling vehicles. In Beijing, prospective buyers of an internal combustion engine car must win a lottery first and then wait for a long time to get their hands on a new car.
The poor quality of the air in cities and the protests by people against increasing pollution has forced the govt. to take tough stand against low fuel efficiency vehicles. The regulations are expected to be tighter in the future.
This is good news for low emission cars as the governments as well as buyers, across the world, now view these cars favorably and see them as the future of urban transportation. Overall, it means that the future of low emission cars is really bright