2012 Hybrid cars: Has hybrid interest really declined?

The 2012 hybrid sales story is all about Toyota

Or was it all just about the Japanese supply disruption?

If you followed the hybrid headlines in 2011, you might believe the end must be near for hybrid cars, despite recent headlines — even from a major oil company — regarding the alleged massive upside potential of hybrids heading into the future.

Still, was hybrid interest really down in 2011? Or was the 2011 hybrid story one of shoddy journalism? More important, what story will 2012 hybrid cars sales tell?

According to much of the mainstream auto press, 2011 hybrid sales were down largely because of a new crop of small cars, such as the Hyundai Elantra and the Chevy Cruze, offered increased fuel economy at a cheaper-than-hybrid price. I say nonsense.

Hybrid sales were down in 2011 because of the Japanese earthquake and tsunami. Period. End of story.

Certainly, despite a rise in gasoline prices in the Spring of 2011, that new crop of small cars might have tempered a serious increase in hybrid sales, but those small cars weren’t the cause of the sales decline. Toyota, for instance, was selling as many hybrids as it could bring to market, but because of the earthquake, Toyota just wasn’t able to bring that many hybrids to market.

Similarly, many in the press point to the fact that a number of new hybrids were released in 2011, yet sales still didn’t rise. Please.

If there is anything to know about hybrid sales it’s this: It’s all about Toyota.

To be sure, in the next few years, Ford might give a Toyota a bit of a run for the money, but through 2011, there was Toyota and everyone else. The Prius alone is around half of ALL hybrid sales. Add in the rest of Toyota’s hybrids, including the Lexus ones, and it simply isn’t even worth talking about 2nd place.

And in 2012, Toyota is expecting to increase hybrid sales by at least 60 percent, thanks to the new larger and smaller members of the Prius family.

Despite years of ridicule from the rest of the auto industry, Toyota has defied conventional wisdom and built hybrid cars because they believe in them. In fact, Toyota’s long term business model is significantly hedged to hybrid cars. Perhaps that will end up being a mistake, but it is what it is.

Every other automaker to date, on the other hand, has built hybrids because they have to — it’s been a matter of perception. Green halos and PR has driven the rest of the auto industry to hybrids.

Consequently, to say hybrid sales were down in 2011 because of a lack of interest and increased competition is just bad journalism. It was all about supplies, but 2011 is over. So, whatever.

What will the hybrid sale’s story be in 2012? Again, the climax will boil down to Toyota, particularly the Prius and its growing family. Early data suggests the larger Prius V is already providing a nice lift to Toyota’s hybrid sales. Can the smaller Prius C do the same?

In my opinion, hybrid sales in 2012 won’t just blow away 2011 or 2010 numbers, but all-time hybrid sale’s numbers. Unfortunately, that still won’t mean a shocking number at the end of the year. At the end of the day, hybrids still offer limited potential. However, that limited potential isn’t a result of declining hybrid interest, it’s STILL a result of limited supplies.

Outside of Toyota, automakers simply don’t have the battery supplies necessary to sell more than a few thousand hybrids apiece. Even Toyota has significant supply constraints. Sadly, the auto industry simply isn’t capable of a huge ramp up in hybrid production in 2012, regardless of demand.

Nevertheless, 2012 will be a good year for hybrid sales, and we’ll learn a few things, especially from Toyota’s hybrid sales. For instance, can the larger Prius V push small SUV and minivan fans to give the Prius a try? And, more interesting, can the cheaper and smaller Prius C take some hype out of the 40 mpg — but ONLY on the highway — segment?

That later story is the one I’ll be most interested in following.