Used Hybrid Car Sales Rise
May 27, 2016 / Sara Davis / Outsmart a Used Car Salesman
Hybrid Car Sales Trends
Hybrid vehicles have been available to consumers for about two decades now. They boast an environmentally friendly alternative to gas-only engines, and gives car owners the ability to save some money at the pump.
Hybrid innovation had a lot of industry professionals excited for the years to come. In 2010, J.D. Power and Associates predicted that in 2020, 7.3 percent of all cars sold would be either HEVs or battery electric vehicles, a total of 5.2 million. This was in comparison with the 44.7 million sold in 2010, just 2.2 percent of all vehicles sold.
Scientific American pointed out that other, more optimistic predictions were shared among auto industry experts.
A survey from AutoPartsWarehouse.com found that 86 percent of people think these alternative vehicles will be sticking around, with more than two-thirds of them adding that they will decrease in cost and more people will begin to adopt the trend.
Additionally, 40 percent think that more people should be driving HEVs because they reduce consumers' dependence on foreign oil and fossil fuels and are better for the environment.
Adoption rates slow
Despite so many people rooting for the success of HEVs and touting their benefits, it doesn't seem like many consumers are willing to follow through on their viewpoints. Only 8 percent of AutoPartsWarehouse.com's survey respondents reported already owning an HEV.
Additionally, Edmunds.com reported that most people who traded in their HEVs in 2015 didn't opt for another alternative energy car, marking the first time consumer loyalty for alt-fuel vehicles dipped below 50 percent.
"One-fifth of former HEV owners replaced their cars with an SUV."
Further, more than one-fifth of former HEV owners opted to replace their cars with an SUV.
"For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment," Jessica Caldwell, director of industry analysis for Edmunds.com, explained. "Three years ago, when gas was at near-record highs, it was a lot easier to rationalize the price premiums on alternative fuel vehicles. But with today's gas prices as low as they are, the math just doesn't make a very compelling case."
AutoPartsWarehouse.com's survey results reflected this sentiment. More than half said they didn't think the gas savings an HEV offers are worth the money for an alt-fuel car, and one-fifth said that a regular compact car is just as good at fuel economy.
Changing ideals and perceptions
Scientific American pointed out that the once rapidly rising sales rates of HEVs have begun to plateau, possibly due to changing consumer attitudes, improved engine efficiency and decreased oil prices.
A major driver for HEV purchases was their environmental friendliness and their innovative features. Recently, though, fewer consumers view alt-fuel cars like this. Over the past few years, consumers have held these two factors with less importance when purchasing an HEV. On the other hand, when purchasing an internal combustion engine vehicle, the importance of being green and having the latest technology has gone up.
This could mean that consumers will view these factors as equal between the two types of engine, making the deciding factor something like price or fuel cost, Scientific American stated. When basing the decision between an HEV and an ICEV on price alone, the ICEV has always come out ahead.
While prices have improved over the last few years and the gap between the ICEV price and HEV has gotten smaller, alt-fuel cars are still thousands of dollars more than their ICEV counterparts.
Fuel prices don't help HEVs case, either. Edmunds.com pointed out that if someone were to opt for the $28,230 Toyota Camry LE Hybrid over the $24,460 Toyota Camry LE in 2012, it would take about five years to break even on the cost difference. The average price of gas peaked at $4.67 per gallon that year. Now, with gas prices tumbling and struggling to make their way back up, it would take more than a decade to make up the $3,770 difference.
The future of hybrid
While future sales of HEVs doesn't look promising, Scientific American reported that there is still hope for these green vehicles. Corporate Average Fuel Economy standards implemented by the federal government state that vehicles need to get a lot better at conserving fuel. The goal is to get vehicles to reach 43 miles per gallon by 2025. Automakers may resign to adopting hybrid technologies to meet these requirements, bringing more HEV options to the market, and making them more prominent.
Plus, with the shrinking price gap between alt-fuel cars and ICEVs, people may begin to choose them once again.
While AutoPartsWarehouse.com's survey revealed that only 8 percent of respondents owned an HEV at the time of the survey, more than half said they would seriously consider getting one.
Shane Evangelist, AutoPartsWarehouse.com's CEO, explained, "This survey indicates that alternative energy vehicles appear to have moved well beyond the 'fad' stage and into the consumer purchasing consideration set."