Hybrid Car Market To Expand, But Still a Blip
We all know Toyota leads in hybrid sales. But can anyone else grab a significant piece?
The Prius assortment of vehicles is now the third-most-popular car model in the entire world, not too far away from the No. 2 Ford Focus and the best-selling vehicle of all time, the Corolla. It’s been loved, hated (yep, by me) and placed in political controversy, and has led the hybrid market since debuting in 1997. It is, for all intents and purposes, a mediocre compact car with an extraordinary powertrain and superbly efficient design.
Nothing else has come close in popularity. Toyota’s own “luxury Prius,” the Lexus HS 250h, sold so poorly -- fewer than 3,000 cars last year -- that it was discontinued in January. The Nissan Altima Hybrid, offered from 2007 to 2011 in just eight states, sold just less than 37,000 cars -- about what the Prius does in two months. (Nissan is considering bringing it back for the new Altima.) Ford’s Escape Hybrid, the first hybrid from an American automaker, has sold 113,000 units since 2004; it’s now gone for 2013, thanks to a more efficient turbo-gasoline option. With the Fusion Hybrid, Lincoln MKZ Hybrid and discontinued Mercury models, Ford has sold about 196,000 hybrids worldwide. Even Honda, the innovator behind the ultra-aerodynamic Insight coupe in 1999 -- the first production hybrid ever sold in the U.S. -- is five times behind Toyota at 800,000 hybrids sold worldwide through December 2011.
Still, even with 1.5 million Prius models sold in the U.S. since 2001, hybrids made up a mere 2.1 percent of the 12.7 million cars sold last year, according to industry data from HybridCars.com. In a good month, they can hover near 3.5 percent of total sales. Barring Toyota's offerings, hybrids aren’t a huge money maker after factoring in all the additional development and production costs -- especially when compared with the newest crop of regular compact sedans hitting 40 mpg on the highway.
However, the outlook appears to be brightening. From a recent Booz & Co. survey of auto executives, 70 percent said they were “more confident” in hybrid powertrains than last year. In April, Hyundai and Kia sold more hybrids than Honda’s cheaper Civic and Insight. Audi, which experimented with hybrids as far back as 1989 and came out with 100 plug-in diesel-electric hybrids in 1997, will introduce new hybrids later this year. BMW and Volkswagen are shoeing hybrid powertrains into their smaller models, the 3 Series and Jetta. Volvo is starting to build what Audi did in 1997, only much better. Ford is revamping its Fusion Hybrid, adding a plug-in version, and also bringing the European C-Max as a hybrid-only model.
In the same study, only 30 percent of auto executives agreed that hybrids and other alternative-fuel vehicles could see a 10 percent market share without government support. Yet federal tax credits for new hybrids have all expired, except in the case of costlier plug-in hybrids, which can bring up to $7,500 in individual credits. In a market where a Chevrolet Volt runs $40,000 and a Prius plug-in bases at $32,000, we’re not going to see 10 percent without the feds buying them for us.
You make a good point. However, I recall one of the reasons why people prefer the Prius is because of it's unique looks. It wasn't selling all that well until the first redesign. Once Toyota made it look like a spaceship it suddenly looked like a futuristic vehicle befitting a hybrid. It made a huge difference because it was all about making a driving statement. It was no fun driving a hybrid around unless other people could immediately identify it as a hybrid. I think that had a lot to do with why Honda's redesign of the Insight resulted in a Prius-looking vehicle.
Thumbs up if you've ever been stuck behind a slow-moving Prius.
All hybrids are just a way to sell the market that the word "green" has become. People feel "better about themselves" because they are "saving" the environment. All hybrids are NOT personal money-savers; some much more than others. Take the Tahoe Hybrid for example:
Some actual numbers - calculated about 6 months ago, with gas at $3.60/gal., driving 15,000 miles a year:
Tahoe Hybrid vs. Tahoe
Base Price $51,000 $38,000
MPG 23 mpg 21 mpg
Cost of fuel per year $2347.83 $2571.43
So, the fuel savings per year for the hybrid is $223.60, but the sticker price was $13,000 more. Divide 13,000 by 223.60 and you get 58. So, in 58 years - or 870,000 miles - whichever comes first, the hybrid will save you money.
Worth it now?
Most hybrid models cost an additional 3 - 6 thousand dollars and as Ford has discovered with their Escape Hybrid if you just make a non hybrid with comparable fuel economy consumers will buy.
Todays newest vehicles are finally getting better MPG and for many consumers to fork over the extra dough, hybrids need to get much, much better MPG.
In Europe, people who don't want to be driving a Toyota tend to choose from a number of manufacturers (BMW, Opel, Ford, VW) that offer regular, petrol cars with exceptional economy (99g emissions) with very good driving dynamics and at reasonable prices. So until hybrids or plug-ins evolve technologically to make real financial sense, they will remain at relatively low sales.
"Have to disagree with you Verum. If you are in the market for a new car it makes complete sense to buy a hybrid, if it suits your needs."
He is making that argument because of the fact that hybrid resale values, typically, drop faster than non-hybrid values. That battery will go south one day and when it does, it will cost a lot to replace it. Current market values for the battery replacements range from $5,000 to $10,000. All that savings you made in petrol is now going towards that battery pack.
This fact, and combined with the lack of manual option, is one of the many reasons many auto enthusiasts would rather take the bus than drive a hybrid. This is why Annatar argues so fervently for the Turbo Diesel technology as you get near Hybrid combined miles, thanks to highway mpg, all while having strong acceleration and no battery to replace.
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