In December, sales of Toyota’s Prius—the standard bearer of all hybrids—fell by a whopping 45%. In November, sales were off 48%. During those two months, gasoline prices plummeted below $2 a gallon. This proves that America hasn’t turned truly green. More likely, they turned red at the pump back in July when gasoline prices topped $4 a gallon. People fled their suvs and bought smaller cars and hybrids like there was a fuel shortage.
But once gasoline prices fell back to levels that Americans have normally paid, they pulled back on hybrid purchases. Toyota has indefinitely delayed its plans for a Prius plant in Mississippi. Toyota isn’t the only company feeling a pinch. Ford’s Escape hybrid and the competing Saturn Vue hybrid both saw sales sink by more than 40% last month. And the hybrid Civic? Off almost 70%. Ouch.
Jim Lentz, President of Toyota Motor Sales USA, notes that for the year, hybrid sales fell only 12%. That shows better staying power than a car market that fell 18%. His point shouldn’t be ignored. He is also right when he says that in the long run, gasoline prices will rise and hybrids will be a better sell. Plus, he says, 80% of Prius owners trade in for a new one. That means the existing buyers keep coming back.
But annual numbers are padded by the huge fuel-price spike of the first half of the year. Recent months show that when gas prices fall, consumers aren’t buying. This creates a huge dilemma for car companies and policy makers. New fuel economy rules will mandate fuel-saving technology. Carmakers the world over are pushing hybrids and other fuel savers to market. But without a hit to the wallet, Americans still aren’t sold on them. Without a price spike—or a tax on gasoline—carmakers will once again be caught between a policy that demands fuel economy and an American consumer who remains indifferent.