Friday, January 2, 2009

Prognostications for Hybrid Auto Sales in 2009

As 2009 commences, we are looking at cheap gasoline once again. Honestly, I never expected to see prices this low again in my lifetime. In fact, I never thought that I would see sub three dollar per gallon prices again.

What does this mean in terms of alternative fuel vehicle sales? We have only had these prices for a few months and yet we are already seeing marked declines in hybrid sales. Granted, all automobile sales are currently depressed, yet the sales of hybrid vehicles is even more so. It is extremely difficult for the average consumer to pay the premium for hybrid vehicles in light of cheap gas. Economic times are dictating the sales of automobiles much more than green technologies.

What do you think will happen this year? Will EV's and PHEV's be forgotten in these days of cheap gas? Will US automakers return to business as usual and will we lose all the momentum for alternative fuel technologies we have built up? I hope not.

A sobering article from

Americans’ appetite for hybrid cars is evaporating as tumbling fuel prices and tighter household budgets trump environmental concerns.

The sudden reversal in what was, until a few months ago, one of the hottest segments of the world’s biggest car market creates a new area of uncertainty for carmakers, such as Toyota, General Motors, Ford Motor and Honda, that are investing heavily in hybrids and other fuel-efficient technologies.

Industry executives, including Alan Mulally, Ford’s chief executive, have joined environmentalists in urging US politicians to consider the hitherto taboo idea of raising petrol taxes as a way of encouraging fuel conservation.

US hybrid petro-electric sales in November shrank 53 per cent from a year earlier, compared with a 37 per cent drop overall, according to Autodata, a market-research firm. December sales, to be announced on Monday, are to show a similar trend.

Sales of most hybrid models have dropped sharply. Demand for Toyota’s Prius hatchback, the top-selling hybrid, fell by almost half in November from a year earlier. The Camry sedan was down 57 per cent, and the Ford Escape crossover 35 per cent.

The setback has been pronounced for larger models, touted as much for performance as fuel economy. Sales of the Lexus RX400 sport-utility vehicle are now little more than a third of the level a year ago., an online motor service, reports that searches for hybrids on its websites are running at less than a quarter of their peak in May.

George Pipas, Ford sales analyst, said: “The lower gas prices are, the tougher the proposition is to pay a premium for a hybrid engine.”

Hybrid vehicles typically cost $3,000-5,000 more than their petrol equivalents. Toyota has used up tax credits available for hybrids, and several other manufacturers are close to their limit. estimates that a Prius owner must now wait more than eight years to recoup the extra cost of the vehicle in fuel savings, compared with three and a half years when the petrol price climbed above $4 a gallon last spring. The average price is now about $1.61.

Mr Pipas said that belt-tightening in the face of the weakening economy had become the dominant factor in the US car market. Small cars accounted for 18.7 per cent of sales in the three months to November, up from 16.6 per cent a year earlier, in spite of the slide in petrol prices.

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