Gas Mileage Rises, Hybrid Car Sales Fall: Here's The Reason

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2012 Toyota Prius

2012 Toyota Prius

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Gas mileage: It's all about hybrids, right?

The 2012 Toyota Prius hatchback and Toyota Prius C models each get a combined 50-mpg rating from the EPA, the highest fuel efficiency of any non-plug-in vehicle sold in the U.S.

So hybrid sales should be soaring.

They're not.

While Toyota has expanded the Prius line from one to four vehicles for 2012, and more makers roll out hybrid models each year, the share of overall U.S. sales racked up by hybrid-electric vehicles has stayed between 2 and 3 percent for the past few years.

For 2011, hybrid sales represented 2.2 percent of a total 12.8 million vehicles sold. That compares to 2.4 percent of 11.5 million overall in 2010, according to figures from LMC Automotive cited by Bloomberg.

The explanation is simple: Hybrid-electric technology definitely improves fuel efficiency, letting a vehicle recapture and reuse energy that would otherwise be wasted as heat from the brakes.

But it's not the only way to increase gas mileage, and it's expensive.

Even at Toyota's high volumes--it has built at least half of the world's 3 million-plus hybrid vehicles since 1997--a full hybrid system like the Prius's adds $1,000 to $2,000 to the cost of a new car. For lower-volume makers, the increment is higher.

2012 Toyota Prius C launch, Detroit Auto Show

2012 Toyota Prius C launch, Detroit Auto Show

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And to meet increasingly stringent fuel efficiency standards between now and 2025, manufacturers will focus most intently on reducing the consumption of their high-volume gasoline engines.

We've long said that the bulk of the gasoline saved globally will come from smaller, much more efficient gasoline engines.

Consider the 2011 Hyundai Elantra mid-size sedan, which dumped any V-6 option. The 2013 Ford Fusion follows suit, and we may soon even see a 1.0-liter, 3-cylinder EcoBoost engine offered in the subcompact Ford Fiesta.

So even as the number of hybrid models soars--most manufacturers will offer one or more--their competition is increasing.

And with U.S. gasoline prices relatively low by global standards, the difference in fuel cost between a more efficient gasoline car and a hybrid may actually be falling.

With more and more compact (and soon mid-size?) cars claiming 40 mpg for EPA highway mileage--and combined ratings of 30 mpg or more--hybrid cars will have to get even higher ratings to make a significant difference.

After all, in 2004, a Toyota Prius got 46 mpg combined, but a Corolla was rated at 28 mpg with an automatic. 

2012 Toyota Prius C launch, Detroit Auto Show

2012 Toyota Prius C launch, Detroit Auto Show

Enlarge Photo

Today, the 50-mpg Prius may get compared to a 33-mpg 2012 Hyundai Elantra. As both cars have migrated up the non-linear MPG scale, the number of gallons saved gets smaller.

Even at $4 gasoline, the annual fuel cost savings over 12,000 miles are less than $500 between the two cars.

Next year, the 2013 Ford Fusion (not the hybrid version) may be rated above 30 mpg combined when fitted with a 1.6-liter EcoBoost four--and it's a much larger vehicle.

Still, it's early days yet, and most industry analysts expect hybrid technology to spread slowly throughout the world's new cars.

It may grow from today's 1 percent of global production (or very roughly 1 million cars out of 80 million vehicles built worldwide) to 5 to 8 percent by the end of the decade.

Cheaper start-stop technology, however, may by then have become almost universal. It simply switches off engines when a car is stopped, and it doesn't require the costly high-voltage battery packs, electric motor(s), or power electronics that hybrid systems do.

So when someone sneers at hybrids because their sales are falling, calmly remind them that it's not about a specific technology.

It's about using less gasoline.


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Comments (14)
  1. "Hybrid cars sales fall" Wrong, They rose.
    Based on the numbers in the article
    2010 276,000
    2011 281,600

    If not for supply problems in Japan, this would have been even better.

    Also, from the linked article.
    Sergio Marchionne, chief executive officer of Fiat SpA (F)
    “if anyone thinks they will meet future EPA rules solely with internal combustion engines, they are smoking an illegal substance.”

    So irrational is people's reaction to the word "hybrid" Buick has dropped the word from its marketing. So you will end up driving a hybrid and won't even know it. It will simply be a car, as it always has been.

  2. @John: As explained in the article, they fell *as a percentage of overall sales*. Unfortunately, to keep our headlines within an acceptable length, we condense at times.

    I almost put in the Marchionne quote, which supports the future-looking part of the article at the end. And I agree that the word "hybrid" has become very polarizing. Of course, sadly, so has the word "Volt" ....

  3. If this had been a GM vs Ford rather than hybrid vs ICE, title would have been "GM loses market share" not "GM sales are down." You would have been more precise.

    The treatment of hybrid in a negative light here is more than a title size limitation.

  4. You can't keep from wondering it it is the oil companies who is putting these false claims into the market. All the reports I've read, and there is a lot of them, claim that hybrids and electrics are selling like hotcakes...the more they build, the more they need. Get the hybrids and electrics out on the market and let them speak for themselves. You may be surprised in how many people really want a hybrid or an electric. I am one of those people and as soon as the price comes down where it won't wipe out my account, I'll get one.

  5. @James: You've proved my point precisely. Do you want a hybrid because it's a HYBRID, or do you want a much more fuel-efficient vehicle? It's entirely possible that more efficient gasoline engines will get you *most* of the way to hybrid levels of efficiency, but at lower cost.

    The fact that you want one but can't afford one speaks to the fundamental challenge. The combination of electric motor(s), high-voltage battery pack, and power electronics added to a (smaller) internal combustion engine isn't likely to fall to zero, ever.

  6. You keep insisting on the cost+ view of the world rather than market priced. It is simply not reality.

    People have a certain amount of money to spend and get the "best" car that they can get. Whether "best" means hybrid or leather seats is a value judgement of the buyer. I assure you that a hybrid system is a better value than leather seats.

    It doesn't help matters that Journos use this false logic and convince people than hybrids are not worth it. Hybrids are total worth the price. Leather seats are not.

    In my case, I would have either bought a 2006 Sienna or 2006 Prius. The price was the same. Absolutely ZERO premium for the hybrid system.

  7. My math shows that at $4/gallon, 100,000 miles driven, 33mpg for the Elantra and 50mpg for the Prius, the Elantra will consume $4,121 more in gas. Take that to 150,000 miles driven and you are looking at $ 6,200 more. Now, I don't know if the Elantra will make it to 150K miles(I am not saying it won't), and I don't know how much cheaper it is; but I personally know of 2 Prius that are still running at over 200K miles with only maintenance work and with the same battery pack. Also, I am not sure you will find gas at $4/gallon in 3-5 years.

    One more thing; some Americans pay a premium for muscle cars that are useless on the roads; some pay for a truck to commute to the office, and some of us don't mind paying a premium to save on emissions

  8. One good piece of news in this article is Voelcker's claim that full hybrid systems only add $1000 to $2000 to the price of the car.

    18 months ago Voelcker was claiming an added cost of $6000. See

    With him changing his tune at this rate, with in less than a year he will be saying hybrid systems don't cost any more than standard ICE in less than one year. :) nice

  9. @John: Given your conviction that hybrid cars are deeply important, I'd have expected you to note the very different contexts of the two cost estimates.

    The estimate of $1,000-$2,000 in this article is clearly identified as an estimate for Toyota, the world's most experienced and highest-volume hybrid maker. Their cost is likely lower than any other maker.

    The $6,000 cost estimate in the article you cite is from a National Research Council study, done in 2009 and released in 2010, that used then-current data. I don't know what production volumes and experience the study assumes to get that $6,000, but I can assure you that for a Prius, Toyota pays FAR less than that!

  10. We would be much better off trying to move to Diesel, then Diesel Hybrids. As Top Gear has proven, Diesel gets much better fuel economy than gasoline. The real problem with Hybrids, especially the Prius is that the pollution used to build the product cannot be made up by lower fuel consumption. In the end a Land Rover is greener over its lifetime, than a Prius is over its life time. Not to mention that the Prius is very inefficient when compared to something like the Volt, where the engine only ever operates at a constant speed, because it is just generating electricity, not having to drive the wheels (except in extreme situations).

  11. @Thomas: Actually, that's not true. According to a 2000 report from the MIT Energy Laboratory, "On the Road in 2020: A Lifecycle Analysis of New Automotive Technologies," fully 75% of a vehicle’s lifetime carbon emissions come from the fuel it burns over its lifetime, with 19% more from production of that fuel.

    Extraction of raw materials for the vehicle adds 4%, and only 2% of lifetime carbon is due to manufacturing & assembly. Hybrids may be slightly higher in raw materials & assembly, due to battery pack & electric machinery, but the difference in overall lifetime carbon in building hybrid vs. conventional cars is negligible.

    Unless that Land-Rover nears 50 mpg, the Prius is better.

  12. We replaced our 2000 v-8 Lincoln LS (Highway mpg rating 23- we could get always 27mpg on the freeway)with a Prius 3. We are a convert. IN Phx. in the non AC seasons we average close to 60mpg.(This is in pretty much ideal conditions suburban driving average 45mpg with lite enough traffic to be able to time at least some of the stop lights, etc. On the highway we consistantly get 55mpg or higher depending on conditions - We do not drive over 70mph. I would love to see a 4 wheel drive hybrid that I could use in the high country to take to the ski slopes. (The Prius is not the one for that.
    Jim in Phoenix

  13. Hybrids are just too expensive when you have to wait 7 years for payback. Consumer Reports rates cars over five years based on cost/mile. The Honda Fit costs $0.44, the Prius $.47, and the Golf TDI diesel $.48/mile. Why? The Fit costs $8-10,000 less than the others. Don't forget the Mini-Cooper, at $0.47/mile, for driving fun. Gas direct-injection engines have made big strides in economy while hybrids have tailed off somewhat in the rate of improvement. Honda's hybrid results have been especially disappointing. I'm still hoping for a turbo-diesel/hybrid plug-in that gets over 70 MPG. How about it, Ford? Mazda? Subaru? VW?

  14. The problem I see with hybrids is that the people who are poor enough to worry about gas prices can't afford hybrids. So what you end up with is mostly upper-middle class people buying them because they primarily want to feel like they're helping the environment, not for economic reasons.

    To make a real difference environmentally, we need cheaper ICE cars with small gas engines, diesels, and turbos (all including start/stop technology). That's the only way you're going to get widespread adoption of higher-mileage vehicles in the foreseeable future.

    In the long run, it's going to be improved batteries and ubiquitous charging stations that make pure electrics the most effective means of helping the environment, not hybrids.

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