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 the record $4-plus peak seen in 2008. That same month, Toyota ( TM ) and General Motors ( GM ) reported record sales for the Prius hybrid and Chevrolet 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.
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