Why are Toyota Prius sales down?
Hybrids. All about California?
What’s the problem with the king of hybrid cars?
Compared to last year, Toyota Prius sales are down more than 15 percent. Why?
Is it the depressed California auto market still reeling from massive losses in property values? Are buyers simply waiting for plug-in vehicles? Is it gas prices? The recall scandal? All of the above?
Not long ago I heard an auto analyst claim that California auto sales have improved from “horrible to bad”. Since a majority of hybrid cars are sold in the golden state, a drop in hybrid sales isn’t that surprising. Nonetheless, gas is still averaging $3.51 in the West – almost 75 cents higher than the national average. Coupled with some of the best hybrid deals ever, especially on the Prius, shouldn’t sales be rising, or at least holding their own in California?
Recently, some have argued on this blog that consumers are waiting for plug-in vehicles. Really? Last I heard there were only 10,000 people with $100 deposits on the Nissan Leaf. Likewise, GM has made it quite clear that Volt sales will be very limited by supply for at least the next few years. Can plug-in demand really be behind the lack of Prius interest – and hybrid car interest overall?
Then, of course, there’s the Toyota recall scandal; however, Prius sales haven’t tanked nearly as much as many other hybrid brands. So, a decline in Prius sales is certainly about more than just the recall scandal.
Ultimately, the decline in Prius sales is probably a mixture of all of the above, and even more variables.
The Future
So, what does the decline in Prius sales indicate for the future of hybrid cars and plug-in vehicles?
In recent months both Ford and Toyota have made very bullish forecasts for future hybrid sales, such as at least 20 percent hybrid by 2020. Likewise, Nissan has claimed as much as 10 percent EV by 2020, and the government has claimed 50 percent battery powered penetration by 2030.
What changes so dramatically in the next few years that we achieve such high levels of penetration when after a decade hybrids still can’t overcome even 3 percent penetration?
Certainly, it’s easy to claim that much cheaper battery prices are around the corner, and/or that much higher gas prices are inevitable since both assertions are probably true, at least to some extent.
Nevertheless, commodity prices will limit the downside cost potential of lithium technology at a price that will still be very hard to compete with gasoline and ever more efficient internal combustion engines, suggests a plethora of research. Higher gas prices, on the other hand, would mean consumers have less money to spend up front on transportation according to the studies. Thus, consumers would have to downsize into cheaper and cheaper vehicles rather than hybrids and plug-ins and their greater upfront costs.
In fact, to some extent, that is exactly what has happened since the recession and gas spike. Consumers have downsized into more efficient vehicles, but they have not converted into hybrid vehicles. And with the greater costs and limitations of plug-in vehicles, can a mass exodus from gas vehicles into plug-in vehicles really be expected?
The Toyota Prius has now been on the road for more than a decade. During that time, according to Consumer Reports, JD Power, etc., the Prius has been one of the most reliable and most repeat-buyer-coveted vehicles available. Additionally, many Prius hybrids with old battery packs – less technologically advanced – have survived not just 10 years, but hundreds of thousands of miles without a battery pack replacement. Therefore, newer NiMH-powered hybrids should have even longer life spans. Regardless, in terms of life span, the Prius has proven itself.
Ultimately, the Prius is an exceptionally efficient and likable vehicle, especially for urban commuters – a group of drivers that represents far more than just 2-3 percent of American commuters. And, today, the Prius deals are even better. More important, compared to the 2008 gas spike, for example, Prius buyers are today literally saving several thousand dollars up front on their purchase. (How much gas does several thousand dollars buy for a Prius driver, even at $5.00 per gallon?)
So, seriously, why are Toyota Prius sales down if the battery is on the brink of revolutionizing the auto industry? Where’s the disconnect?
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Unfortunately for auto industries hybrids are a tough sell these days.First and biggest factor, is of course the economic recession.When gas prices came down, the priority of buying a hybrid fell off quite quickly. The problem is avaibility and delay plus overcharging of battries.I would request People to buy hybrids because they use the technology of the future and also better forenvironment, not because Americans are only concerned about gas prices.
i agree with this article, but toyota will make big move to solve the problem, as i know Toyota Prius still take a lead in the market for hybrid vehicle.
But the bigest hit is when toyota prius have no right to get tax incentive in united state market.
if toyota prius have sold more than 60.000 unit they have no right to get tax incentive, this problem will make toyota thingking so hard to give the best for the Prius user.
Gas prices are up so far in 2010 compared to 2009. The average in 2009 was $2.35. So far in 2010 it is $2.77.
Overall, vehicle purchases have increased as well, with a move to smaller more fuel efficient vehicles, yet hybrid share is declining.
I don’t disagree that gas prices are still too low and that the economy is probably going to take several years to recover. Nevertheless, it seems consumers are acting exactly the way that many consumer studies have predicted. Up-front cost-effectiveness with a secondary, but noteworthy focus upon fuel efficiency is driving consumers and will also drive tomorrow’s consumers.
Consequently, even if the economy improves a bit, but is coupled with significantly higher gas prices, the higher gas prices might make the economy feel just as recessed at the consumer level. Thus, consumers, one would imagine, will probably continue to act much like today. They will downsize and look for a little better fuel economy, but they are not going to pay up front for long term energy savings.
The move to batteries, whether in hybrids or plug-ins, is a step in the right direction, possibly the biggest step ever in the auto industry. Nonetheless, it seems that other technological advances could be just as important, and perhaps just as necessary. I still don’t think the US auto industry, in particular, is yet thinking outside of the box, and I think significantly more innovation will be required in the very near future.
I echo a lot of Larry’s economic and political concerns and yet, scarily, I think this is the calm before the storm. Even if the economy recovers, the world is becoming a much more competitive place. There is a lot of talk in the press that wants to call the bailout of the US auto industry a success and that only good times are ahead.
I think the bailout was absolutely required and it has worked out relatively well, although I wonder if things would be quite as good if not for Toyotagate. Nevertheless, I think the US auto industry will soon face much more difficult conditions than it has ever faced. As crazy as it seems, I really do believe this is just the calm before the storm. It might even get sunnier for a couple of years, but when the storm does hit, we’re not going to be ready.
It’s still about gas prices.
While they may be as high as $3.50 in some areas, gas prices are still significantly lower than in 2008.
As gas prices continue remain below the 2008 levels, consumers begin to slowly slipback into their old habits….
there’s a lot of people without jobs and a bunch more worried that they’ll lose their jobs and yet another bunch that thought they could retire on their 401K then found out it lost 1/2 of it’s value.. then the folks who are so far underwater on their homes that they can’t even afford to sell them even if they found another job someone where else.
All this adds up to a whole bunch of people who are not going to draw down their cash for a new car or go into debt for a new car.
This is not going to turn around anytime soon.
The country is in deep doo doo economically (as well as politically in my view).
I don’t think anyone over 40 is going to anything but hunker down.
The guys in their 20’s and 30’s are going to have to spark a recovery, eh?
so If you are a young guy – get out there and buy something!
Hates to hear sales are down! I am considering buying one soon about to go test drive one! I will be back and let you know it goes! Great site by the way!