Will Cheap Gas Kill Electric And Hybrid Cars?
High gas prices tend to be good news for electric cars and hybrids.
In March 2012, gas averaged $3.92 a gallon, bringing it uncomfortably close to therecord $4-plus peak seen in 2008. That same month, Toyota (NYSE:TM) andGeneral Motors (NYSE:GM) reported record sales for the Prius hybrid andChevrolet Volt hybrid-electric car, respectively. Today, however, the nationwide average gas price for February is below $2.00 per gallon. Now that gas prices are at record lows, the argument that these eco-friendly vehicles save consumers money at the pump seems weak.
A look at last year’s car sales data reveals that Americans are increasingly gravitating toward pickup trucks and SUVs, which, while improving their fuel consumption, are still less fuel-efficient than electric cars and hybrids. In 2015, car makers sold an unprecedented 17.5 million vehicles, up 5.7% from the prior year and 0.4% from the record set in 2000. According to Kelley Blue Book, more than half of all transactions comprised truck and SUV sales, driving up the average sales price to $34,428.
Several factors contributed to last year’s uptick in car purchases: increased employment, low interest rates (which means better deals on auto financing) and cheap gas. Apparently, these trends haven’t extended their benefits to electric and hybrid cars. Per InsideEVs, overall electric vehicle sales declined year over year between 2014 and 2015, falling 5.2% from 122,438 to 116,099. According to data from HybridCars.com, hybrid sales plummeted 14.9% from 451,702 in 2014 to 384,404 in 2015.
December was a great month for electric cars. However, as HybridCars.compoints out, this is standard for the industry, as many consumers hurry to buy eco-friendly cars at the end of the year in order to qualify for tax credits. Per InsideEVs, a record 13,699 electric cars were sold that month – a 5.1% increase from a year earlier. HybridCars.com reports that Tesla‘s (NASDAQ:TSLA) Model S was responsible for the bulk of electric car sales in December, although the car maker doesn’t release monthly sales figures.