Hybrid share of car market stalls - poor economy, cost slows share from 3.6% to 1.6%

[JohnWxy]

http://content.usatoday.com/communities/driveon/post/2011/06/hybrid-car-sales-stagnate-as-buyers-opt-for-fuel-thrifty-compacts/1

The hybrid share of U.S. auto sales peaked at 3.6% in July 2009, Edmunds.com says. Last month, it was 1.6%, depressed also by production cuts for some models due to the Japan disaster, but not enough to account for all the drop.

The new conventionally powered cars use various strategies to boost gas mileage to near-hybrid levels — without the batteries and electric motors that can add $6,000 on average to a vehicle's cost, according to J.D. Power and Associates.

"Even with the fuel savings, it doesn't make sense to buy a hybrid" for many buyers, says Power senior manager Mike Omotoso. "This year, we had $4 gas (in many cities) but we saw the introduction of compacts that get 40 mpg. All of these cars are considerably cheaper than hybrids."

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Sales of high-mileage, high-value conventional compacts such as the Hyundai Elantra (shown above), Ford Focus and Chevrolet Cruze are hot, while hybrid sales have stagnated.

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...economic hard times hit hybrid sales as people struggling to get by opt for cheaper alternatives. As gas prices continue their rapid rise for the foreseeable future this will reduce our economic growth and job creation. The persistently high unemployment and lack of job security not to mention meagre income growth (if there will be any at all) will mean adoption of the expensive electric cars will be significantly hampered.

What we need is a near term approach to reducing gas consumption to minimize the increasing price of petroleum. This will minimize the adverse impact on our economy and personal incomes. The best tool we have to minimize gasoline consumption to slow the rise in the price of petroleum is to expand ethanol use. Otherwise, you can expect electric cars not to take twenty years to be on the road in any real numbers but instead it will take more like 35 years-- to get, perhaps, 7% to 12% of the fleet being electrics (hybrids and PHEVs).

[Warren Stupidity]

1. I figure I'm saving 1200-1500/yr.

And I tend to keep cars at least 7 years, so the math works for me.

[JohnWxy]

2. given the number of miles your driving I wonder what resale will be at 200,000+ miles?

I think the guy from J.D. Powers was talking about the more typical (12,000 per year) driver:

"Even with the fuel savings, it doesn't make sense to buy a hybrid" for many buyers (note that does not mean ALL drivers_JW), says Power senior manager Mike Omotoso. "This year, we had $4 gas (in many cities) but we saw the introduction of compacts that get 40 mpg. All of these cars are considerably cheaper than hybrids."

of course, some people like to compare their gas expenses with a hybrid to their old v-8 Buick, or Duelie Pickup. New car buyers will be comparing similar vehicles - in terms of weight and especially payload.

But maybe the figures quoted in the article, based on all buyers, are a fluke. Maybe people will still shell out an extra 6 grand when they don't have the money. Maybe, even without the money or job security, they will spend 6 grand more than they would need to spend to get a fuel efficient Ford Focus, or Chevie Cruze or Hyundai Elantra. I guess anything's possible.

(note the annual gas savings between a car getting 33-35 mpg and a hybrid getting say 40 - 50 (50 for a Prius) are going to be about $445 if they are driving 12,000 miles per year with gas priced @ $3.60. To recover the $6,000 it would take about 13.5 years.)

[Warren Stupidity]

3. I've never done 12,000/yr with any car I ever owned.

That's 230 miles a week - 32 miles a day. My commute alone is over budget, sometimes in recent driving history, over budget one way. Yes I put a lot of miles on a car, so "works for me" is operative. Plus I keep cars until the resale value is near zero. If you are a 12,000/yr driver and/or a low mileage trade-in buyer, don't buy a hybrid.