Green Update: Death of the Hybrid?

2012 Hyundai Sonata Hybrid

Some of you will remember Mark Twain’s famous line, “The reports of my death are greatly exaggerated.” And so it is with hybrids and indeed EVs like the Nissan Leaf.

Consumer Reports recently gave a bum rap (a non-recommendation) to the Leaf and the Hyundai Sonata Hybrid (above). Whether that will really impact sales of either is anyone’s guess. CR is, after all, the magazine car aficionados love to hate.

If you look at sales figures and market share for EVs and hybrids, the present picture is gloomy because of two factors especially: supply problems from Japan, where the Prius (the top seller) is built; and low gas prices. The economy is clearly another factor, since electrified cars cost a lot more and therefore turn off buyers in these tight times.

A very good rundown on lagging hybrid sales indicates that despite low September numbers, the market is still there, waiting for better selection (inventories are low), even though there are some 30 models available now, with more luxury German stuff in the pipeline.

September auto salesToyota has the broadest offering and is still on top by a large margin. Ford has discontinued the Escape Hybrid for 2012 and made, I think, a foolish, old-Detroit move by badge-engineering the Fusion Hybrid into a Lincoln MKZ version and pricing them too close together. Sales of the Fusion Hybrid, a very good car, dropped 67 percent.

GM has built a bunch of mediocre hybrids and put all its chips on the Volt, which is not selling well. So some people never learn.

The hybrid’s gas-powered competition has improved substantially in a short time, with better fuel economy driven by turbos and direct injection. But there are also major improvements underway in battery technology, which we hear a lot less about. Cost and weight will come down.

Still, the cost/benefit comparisons are daunting for hybrids right now. Newsday compared six hybrid sedans with their gasoline counterparts and found that they took six to ten years to pay off the cost differential. Ouch. The Prius, however, took only three years.

But most auto writers take the short-term view, and it is notoriously difficult to forecast sales of hybrids. Alex Taylor listed four big reasons why it’s way too early to predict the death of the hybrid:

  • Toyota is currently the only carmaker to commit significantly to hybrids, and the Prius accounts for nearly half of all hybrid sales.
  • The Germans are getting into hybrids with both feet and producing some of the best cars.
  • CAFE standards are forcing manufacturers into hybrids, as gas-powered cars alone won’t permit them to comply.
  • Gas prices are “going nowhere but up. We may or may not be approaching peak oil, but the economics of limited resources are inescapable.”

Forecasters have consistently overestimated the market and the timing for hybrid sales. They do this to attract investors and because they think it’s good PR for the industry. Do you agree?

—jgoods

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1 Comment

  1. I think the word is out on hybrids— Regardless of what the manufacturers say, they save little fuel, certainly not enough to every make up the high cost. High mileage drivers spend most of their time at freeway speeds where the heavier weight of hybrids doesn’t provide any savings. People who drive less mileage can get better mileage, but not enough to justify the cost. Hybrids are also more electronics intensive, which means more toxic waste and environmental impact. So the public is starting to realize that these “green” cars are not really green after all.

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