Falling gas prices lifting trucks, sinking hybrids, other ‘green’ vehicles

gas prices

Perhaps “liquid gold” should be downgraded to “liquid silver.”

That’s because the average price for a gallon of liquid gold – gasoline – at the end of October stood at just $3.003, according to AAA, down 10 percent from the beginning of the month.

In fact, gasoline prices are lower in real terms than they have been in 20 years, and all indications point to prices at least holding steady, or even continuing to drop in the near future.

That sounds like great news – unless you’re trying to sell a Prius.

While truck sales have risen 17 percent and SUVs have risen 20 percent on the year, sales of hybrids such as Prius, plug-ins and EVs are down 5 percent, according to a National Public Radio report. Sales of green segment cars are down for the fifth straight month this year, Autoblog says, falling 11 percent year over year in August and 9.6 percent in September.

Trucks make up 53.5 percent of the model mix currently on the road, according to Edmunds.com data, while cars make up 46.5 percent. A year ago, when the average price for a gallon of gas was around $3.50, the mix was evenly split between cars and trucks. The red-hot crossover SUV segment, incidentally, makes up 20.4 percent of market share through September 2014, Edmunds indicates.

The Toyota Prius, meanwhile, which leads the green segment in annual sales, has seen its sales volume drop 11.4 percent on the year through September.

“If you were to turn back the clock seven years, Prius was at the height of its game,” said John Krafcik, president of TrueCar, the car-buying and selling platform. “Demand was high, inventory was limited, and incentives were practically non-existent. Fast forward to this year: Hybrid popularity is waning, and the country’s love of the full-size pickup truck is remarkable.”

“Last month, incentives for the main Prius model … averaged $2,309 per vehicle,” according to TrueCar. “By comparison, in September 2007, the Prius sold with average incentives totaling only $91.”

And the outlook on gas prices doesn’t provide much consolation for prospective sales of green vehicles.

Tracy Noble, AAA’s mid-Atlantic region spokeswoman, said demand for gas is lower and supplies are higher than in recent years. The price has dropped at the pump 34 percent since its 2014 high in July, and a price of $2.50 or $2.60 is a possibility going forward, she said.

“Right now,” said Krafcik, “automakers with a heavy mix of hybrid vehicles, like Toyota, are feeling the effects associated with this turning of the hybrid-popularity tide.”

– Philip Ryan

Posted in Economics, News, Selling, Trends

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