The hybrid will continue to play a role in the fuel efficiency game, but it will not be the only player from now on.
John McCormick - Detroit News - July 26, 2006
Lexus performance hybrid like the new GS 450h should sell well.
So are hybrid vehicles - at least some of the current models - losing steam in the market? With sales of the Toyota Prius off by 12 percent so far this year and the Honda Accord hybrid down by 58 percent, it's looking that way. The cooling of the hybrid phenomenon comes at an interesting time, just as gas prices have settled in above the psychologically important three dollar level.
The initial enthusiasm for hybrids was founded on the second generation Toyota Prius, an impressive demonstration of Toyota's engineering expertise, but ultimately a car that appeals to a limited, if committed, audience.
Ford tried to widen the hybrid market with the first truck application, in the form of the Escape, but it has run into softer than anticipated sales because of a fundamental problem that all hybrids face; they are significantly more expensive than comparable conventional models. The early adopters of hybrids were idealists or fanatics, who ignored the price premium and were blind to the real world fuel economy returns, which turned out to be far less impressive than the misleading government tests suggested.
Now that reality has set in, the bloom is fading from the economy-focused hybrids. The hybrid models that have sold relatively well in recent months have been performance-oriented designs, such as the Lexus LX400h. Complex and very expensive, performance hybrids are a distortion of the original hybrid premise. These hybrids essentially act as sops to the environmental consciousness of luxury vehicle owners. If these people really cared about lowering emissions and improving their mileage, they would be purchasing the Prius.
On a wider scale, the softening condition of the hybrid market is evident in Ford's recent decision to abandon a stated goal of making 250,000 hybrids by 2010. What changed the outlook at Ford is the realization that the early hybrid market appeal was overstated and that there are multiple paths to improving fuel economy. So now we have Ford publicly espousing a series of solutions, such diesels, more advanced gasoline engines, E85 ethanol fuel and even new battery technology.
This approach echoes the strategy at GM, Chrysler and other major automakers, including Toyota, all of whom now publicly acknowledge that hybrids are not the only answer to America's oil addiction. This is not to say that the hybrid vehicle is on its way out. A fairer prognosis would be to suggest that hybrids are going through a transition, evolving into different classes.
Ford has not given up on the breed; witness a recent $1.8 billion investment in an economy hybrid car program in Britain. Toyota plans to work on hybrids with plug-in rechargeable batteries. And GM, DaimlerChrysler and BMW are jointly producing a two-mode hybrid system, suitable for larger trucks and cars.
In retrospect, what has happened to hybrids is not entirely surprising. The early mania, stirred up by the general media and zealous early Prius owners, has dissipated, as the public discovered that the economic reality of hybrid purchase was less attractive than anticipated.
Are buyers still looking for more fuel efficient vehicles? With $3-plus a gallon gas prices, there's no question fuel economy is at or near the top of many people's consideration lists. The hybrid will continue to play a role in the fuel efficiency game, but it will not be the only player from now on.