As Gas Prices Drop, Hybrid Sales Shift Into Low Gear Gas prices are falling — and so are hybrid car sales. Analysts say better gas mileage for traditional vehicles, combined with low gas prices, is giving hybrids a run for their money.
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As Gas Prices Drop, Hybrid Sales Shift Into Low Gear

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As Gas Prices Drop, Hybrid Sales Shift Into Low Gear

As Gas Prices Drop, Hybrid Sales Shift Into Low Gear

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Drivers may have noticed that gas prices are falling. And while that's good news for consumers, it's not such good news for hybrid car sales. While the rest of the auto industry is booming, sales of hybrids are slumping. NPR's Sonari Glinton says there's more behind this than just the price at the pump.

SONARI GLINTON, BYLINE: Even before gas prices started to fall significantly, these two things were happening in the car business - first, hybrid sales were falling and second, the number of trucks, SUVs and luxury sedans have been on the rise.

JOHN KRAFCIK: It's rather remarkable. During months when gas prices are low, less fuel-efficient cars tend to take a greater share of the market and vice versa. It's a fairly one-to-one relationship.

GLINTON: John Krafcik is president of truecar.com

KRAFCIK: I think it's fairly interesting, from a cultural memory standpoint, that American car buyers for the most part don't seem to have memory of gas prices two, three or six months ago.

GLINTON: Sales of what the industry calls advanced drive vehicles are down about 5 percent, and that's your traditional hybrids, your plug-ins and all-electric cars. So far this year, trucks are up by 4 percent and SUVs are up by 12 percent. What's interesting about those numbers is that SUVs and trucks and luxury cars are where all the profits are in the car business - hybrids, not so much. Again, John Krafcik - and by the way, he used to run Hyundai Motors.

KRAFCIK: It's probably the case that automakers as a whole right now are losing money on their hybrids. So they may not necessarily be disappointed with the changes that we're seeing right now in fuel prices which seem to be driving some consumer behavior shifts.

JESSICA CALDWELL: If gas were $5 a gallon, this would be a completely different story...

GLINTON: Jessica Caldwell is senior analyst with edmunds.com

CALDWELL: ...Especially if it went from, you know, $3.20 one day to $5 in a few months. And that would, you know, signify a shock.

GLINTON: Caldwell says another part of the story is that overall cars, trucks and SUVs are - regardless of segment - a lot more fuel-efficient.

CALDWELL: Right now, I mean, the internal combustion engine is probably the biggest competition to traditional hybrids because the fuel efficiency has gotten so much better on those cars. You know something that's 30 miles per gallon is good and an improvement for a lot of consumers. And they just go with that rather than paying the additional cost of a hybrid or a plug-in or even an electric.

GLINTON: Caldwell says something has changed in the mind of the American consumer. An example would be that when surveyed, pickup truck buyers say fuel economy is one of their top concerns. A decade ago, it wouldn't of even made it into the top 10. Caldwell says while customers may not be running out and buying hybrids, all customers are much more concerned about fuel economy.

CALDWELL: I think that that is now just a given. Does it get good feel economy? 'Cause if it doesn't, then I won't even consider buying it. It has to get better fuel efficiency than the vehicle I had before. It has to be, you know, good in its segment. I think that's kind of the barrier to entry.

GLINTON: Now we come to the 800-pound gorilla of the hybrid car world - the Toyota Prius. It was the first major hybrid car and likely the only profitable one. And it makes up at least 25 percent of hybrid sales.

Roland Hwang is with the Natural Resources Defense Council. And he says declining Prius sales are a large part of why hybrids are declining overall.

ROLAND HWANG: What is going on there is that the Prius is at the end of its product cycle life. Every four or five years vehicles turn over to a new model. So it's getting a bit long in the tooth for the consumer market.

GLINTON: Hwang says when Toyota comes out with a new Prius next year we'll likely see hybrid sales pick up. He also says gas prices won't always be low. And unlike the last price spike, now, almost all carmakers have hybrids or fuel-efficient options.

HWANG: So when the next price spikes come, when we see the surge in demand for fuel-efficient vehicles like hybrids, the auto companies won't go bankrupt like they did last time. We won't see the same kind of crisis as we saw last time.

GLINTON: Hwang says hybrid technology is here to stay. You'll probably be much less likely to notice it though in the future. Sonari Glinton, NPR News, Culver City.

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