Posted: March 20, 2008

Phil Reed, consumer advice editor at Edmunds.com, has a bone to pick with J.D. Power and Associates over its new survey showing that while many would-be car buyers want to purchase an environmentally friendly vehicle, only 11% are “very willing” to pay more to go green. Reed, an expert in consumers’ car-buying psychology, strongly disagrees. “People will pay to be green,” he emphasized in an interview with EnergyTechStocks.com. Within two to three years, he said, going green “will be a big piece of the car-buying decision” for nearly every American.

If Reed is correct, the implications for investors are substantial. Reed predicted that as this new wave of green car-buying takes hold in the marketplace, “a lot of car models will die,” though, ironically, not the icon of gas guzzlers, the Hummer, because people who buy Hummers “are in such denial” about rising pump prices, according to Reed.

Reed predicted that, after their introduction between 2009 and 2011, plug-in electric hybrid vehicles (the kind you fill up with relatively inexpensive electricity from an ordinary outlet) “will take off” in 2012, revolutionizing the automotive market and making household names out of several car models and manufacturers that are unknown today.

Reed explained that with General Motors in particular seemingly unable or unwilling to commit to plug-in vehicles, “Somebody is going to come out of nowhere” and become a global heavyweight. Asked to name the top contenders, Reed mentioned Zenn Motor Co., which is publicly traded, plus a number of privately-held firms: Phoenix Motorcars Inc., Tesla Motors and Miles Automotive Group.

Out of this group, Reed said, may well come the answer to America’s energy crisis – “salvation,” as Reed put it – namely, a car that doesn’t need gasoline and doesn’t generate tailpipe pollution.

Coming Tomorrow, March 20, Part 4 of Reed Newsmaker – The return of turbocharging