As gas prices fall, drivers dump hybrids for SUVs

Here’s a great story to start off Earth Day for everyone. Thanks to a boom in domestic energy production driven by new technologies such as hydraulic fracturing, the United States has become a global energy leader. Increased supplies have led to dramatic reductions in the price of oil and gasoline which have persisted for quite a while now and don’t show any signs of going back up in the near future. This has some car buyers who previously turned to hybrids and electric cars rethinking their priorities and dumping their green machines for some muscular sports utility vehicles.

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So far this year, only 45% of people that traded in an environmentally-friendly hybrid car purchased another, according statisticians at Edmunds.com. In 2012, that figure was over 60% and this is the first time it has ever fallen below 50%…

Sales have fallen for brand new alternative fuel vehicles. In the first quarter of 2015, new hybrid car sales was only 2.7% of the market. That’s down from 3.3% in the same period last year.

A small bit of reality seems to have dawned on industry analysts as they examine the sales data.

“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,” Edmunds.com Director of Industry Analysis Jessica Caldwell said in a statement.

Three years ago, when gas prices were at near-record highs, Caldwell said more people were willing to pay a premium for the “alternative fuel vehicles.”

Well, imagine that! Consumers being driven by “financial motives” rather than embracing the green energy agenda shouldn’t come as any surprise, though activists certainly will be disappointed. But in the end, people have to make smart choices, particularly in a tough economy. When gas was near five dollars a gallon it was worth it for some folks to spend the extra money on a hybrid because the savings on fuel over four or five years could make up the difference and save them some cash. But when gas is down near two dollars you would need to keep your hybrid running for a decade or more to reach the break even point.

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I can relate to those concerns. We’ve been driving SUVs since the 1990s and I freely admit that there were times when I audibly groaned as we were filling up the tank at the high point of gas prices. But it was a choice we made for a variety of reasons. Because of trips for camping and fishing along with other avocational activities, we need the extra room which an SUV offers. Also, my wife was on the road pretty often and I felt better knowing she was in a vehicle that could survive some damage. This came to pass two years ago when she was sitting at a red light near our credit union. A teenage girl driving a little hybrid was apparently doing something on her phone and just slammed into the back of our truck, albeit at a relatively low speed. My wife later reported that she hardly noticed the hit and our SUV only needed minor repairs to the bumper and the license plate holder. The econo-box was totaled. (I mostly felt bad for the girl when she had to explain it to her father.)

The green energy forces shouldn’t be surprised that consumers behave in ways which fit their own needs rather than Al Gore’s agenda. But this does explain why they are generally so fired up about passing new gas taxes. As long as energy is affordable, results such as this will remain predictable.

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