I just paid $2.45 for gasoline! But what effect will this have on hybrid sales?

My opinion is there will be a sharp march in the demand for SUVs. Hybrids will drop off markedly. Americans have a very short term memory. About six months. If gas remains low for that amount of time, expect everyone to go back to business as usual. I firmly believe Americans don't like "CHANGE" and don't want to give up their cushy SUV's.

What do I base this opinion on? The countless co-workers of mine belittling me and making fun of me now. They can't understand why you would ever own a Prius now. They are UGLY they say... Slow... and gas is so cheap... They are so unreliable... Yes I know this is all untrue... But this is what they are saying.

Mark my words folks... We are going back to the SUV America... And there is nothing President Obama or President McCain can do about it.

Do I think prices will go up in the short term (think year). No I don't think they will go up to levels that will "anger consumers". Do I think the long term we are going to get screwed? Yep... Once we are out of this recession, and we will within a year, then the speculaters will be back... And we will be back pretty much where we left off.

Then Americans will go all in a panic again. Then my co-workers will give me a nod for how smart I was to purchase a Prius.

Welcome to the short term memory of Americans!!!

 

It also appears that the vast majority of people sat that entire 11 minutes with their engines idling instead of shutting them off.

Your typical engine burns 0.25-0.8 gallons an hour depending on the size of the engine and whether or not the A/C is running, which means that for 11 minutes, they burned through 11-36c worth of gas, which probably offset a good chunk of the lower price of fuel that Costco offers.

It always kills me that people go out of their way to find the "cheap" gas, only to blow their savings by going out of their way, and then wasting more fuel by running the engine while waiting in line. When it's not hot out, anyway, I completely understand when it's hot and you have to run the A/C to keep comfortable, but, if you have to wait any significant amount of time, you'd be better off paying more.

Either way, it's worse for the environment to seek out the cheap gas if you have to wait in line.

 

I have no special gift for predicting the market. I can however explain how this affects me, and perhaps others like me.

I don't care.

I only buy gas once or twice a month. I know that the price next time will be different than the price last time. I don't really keep track of it. For a ten gallon tank I can't be bothered. When I bought my first Prius the price of gas was nothing special. People didn't consider the price particularly high or low. It just was.

Gas is only one of three or so major factors that go into the decision to buy a hybrid. If gas went down to a dollar a gallon (for our viewers abroad, read one pound per British gallon) my other reasons would remain untouched. The car market may shift this way or that, but the overall trend won't change. The alternative fuel vehicles are here, and nothing will get rid of them.

 

I suppose all of that works --- as long as you factor in that your time is worth nothing.

 

Gee, gas under $2 in battle ground state MO but not in blue CA or here in blue WA ($2.45).
This isn't new nor is it a coincidence. GOBAMA!!!!!

However, in answer to your question, sales of hybrids will be a function of their price competitiveness. If the cheap non-hybrids get over 30 while costing under $10,000 they will outsell hybrids. I bought my Prius last summer (07) because Chevy thought the Aveo was worth over $11,000 in July but by September were back to $8500 where they belong. Coincidentally Toyota was being realistic and weren't forcing price gouging extras during this period. Thank you Chevy for helping me make a better decision.

ePS I am lucky, I drive by Costco almost daily and a Chevron station on an Indian Reservation, with better than Costco prices, is often on my route to work.

 

In regards to SUVs. I live in a rural pick-up/SUV dominated area 25 miles outside Seattle. People want their hybrid SUVs and pick-ups that get 50 to 100% better mileage than the non-hybrid counter part as long as they don't lose power. Alternative fuels are also sought after. In this area we lack faith in solar power:

Seattle rain festival August 16 to August 14.

 

In answer to "who are these people' my coworkers (as am I) are highly educated Software Engineers for a software company. They all commute 20 to 30 miles a day driving pickup trucks like Toyota Tundras or SUVs like Jeep Grand Cherokees. They claim they NEED them for all the "haulin" around they do. Well, I venture to say that 95% of the time it's just them in their show boat with no cargo.

See, in more "rural" or small town America (I live in a city of 60,000), like Iowa, they will never change unless forced too. There is a huge cultural difference from California to the mid-west... It's HUGE. People just don't think like you Californians. They don't even really care about the environment. Taking away their big vehicles is like taking away their "manliness" or stripping them of their right to bear arms (I am not against that right btw). BTW: This is not just the attitude of my coworkers. This is the general midwestern sentiment. It is not cool here to drive a Prius or Hybrid!

It does not matter what car manufactures do. These people will never own a Hybrid unless they are forced too. And heaven forbid if it's all electric. That's a sissy car... And that's when they talk about the Tesla. It has to have explosive fuel to be "manly" but if it's electric it's too dangerous! All this means is gas prices have to be high... And have to keep going up for them to change. Gas under $2 will not make them change.

To them Hybrids are too complicated and expensive of a system...

Diesels get better gas mileage...

Or the most common I already own a $35,000 SUV and it would be cheaper for me to keep it till I drive it into the ground.

We also have some Chrysler fans in the company. I just laugh when they tell me all the things they think are "normal" service items... Like rebuilding transmissions at 40,000 miles and new head gasket at 80,000. They have no idea what they are missing.

My bottom line is the Midwest will not change no matter what unless gas prices keep high and keep going higher. Again, car manufactures will always make pickups... So if they make Hybrid SUVs these guys will move to pickup trucks. If there are only Hybrid pickup trucks... They will buy used pickups that are not. They will not change unless gas prices are high...

This is not an indictment of my coworkers. This is just how midwesterners think when gas goes down to more normal levels. I am also a midwesterner too. So -National Security- is number one for why I got a Prius. Gas prices 2nd. Geek factor third. Somewhere around 10 or 20 on my list is the environment. It's cold here. Global warming? Huh? Were you here last winter? Righhht.

I hope this is a little window into the culture of cars and the midwest!

 

The current gas price in Houston area: $1.86

Houston Gas Prices - Find Cheap Gas Prices in Texas

In areas where people have been stung enough to really hurt, I believe the hybrids and other small cars will continue to sell. Once people have realized they are slaves, once they have been shown a way out of bondage, I believe the courageous ones will choose freedom.

 

Buying a hybrid if you don't need a new car doesn't make sense for anyone. The true question is what will drive people to hybrids as a choice when they need a new car. I feel that if it is a choice they'll consider it but if "not available" or "not competitive"; they won't.

As far as your co-workers saying a hybrid is too complicated, what car today isn't? EFI, electronic transmissions, you name it, the average American doesn't have the knowledge or equipment to work on his own car.

Also American Made would help a lot.

 

See, in more "rural" or small town America (I live in a city of 60,000), like Iowa, they will never change unless forced too.

They probably were the same way when the first model T's frightened their livestock. You'll notice they've adapted.


Taking away their big vehicles is like taking away their "manliness"

So give them something big. As long as you've got all that electric tucked away in there, maybe throw in a Jacobs ladder spark effect on each wing mirror for special occasions.


To them Hybrids are too complicated and expensive of a system...

They probably said the same thing about automatic transmissions, and air conditioning, and electronic ignition, and there are probably folks who still prefer real carbureters. The market is shifting and they will shift with it. So what if the Californians have to take the lead?


Or the most common I already own a $35,000 SUV and it would be cheaper for me to keep it till I drive it into the ground.

This gives the technology time to mature. No problem.


We also have some Chrysler fans in the company.

Well, it may be Chrysler-Sendai by then, but they could come out with real cars again.


My bottom line is the Midwest will not change no matter what unless gas prices keep high and keep going higher. Again, car manufactures will always make pickups... So if they make Hybrid SUVs these guys will move to pickup trucks. If there are only Hybrid pickup trucks... They will buy used pickups that are not. They will not change unless gas prices are high...

These folks may be stubborn, but I expect they're not stupid. How about if you give them a generation to get used to this fancy new stuff, and then offer them a serious hybrid pickup? That electric motor offers some nice low end torque for pulling stumps and such, they could also power an onboard welder and some 120 Volt outlets so you can use power tools out in the field. I expect hey'll come around if you have a better product.

 

Me thinks you generalize too much.
Perhaps in small towns in Iowa, but not the midwest in general.
While not as many as can be found in CA. you would be surprised at the number of Prius in Minneapolis/St.Paul.
As for tech, we have relatives in northern Iowa (farmers) who are very open to new technology and change. They have adapted to the presence of wind generators quite nicely and the level of tech going into combines these days is truly impressive.

And yes, I do agree that your experiences are not unique. I just don't feel they are as widespread as you seem to think.

 

I agree with most of the comments people are saying. I am just reporting what I see. Although I would be interested in the Urban vs Rural numbers... Would be an interesting talking point.

 

I see an interesting parallel to scooter sales. I was in Europe this summer and there were small cars and even hybrids everywhere - as there should be when gas was over $8 a gallon-US.

I have been shopping for a Kymco HD200 for a few months now and been annoyed because their prices kept going up and up and almost all were pre-sold. Well now my Kymco dealer has several in stock and they marked the price down $400 which is about 8%. I am going to wait because it looks like the scooter boom is dying down quickly with cheap gas coming on the market again. I am going to wait till gas prices start to rise again to buy my scooter.

As for hybrid sales, I think that the prospect of a real competitive product from Honda in the form of the Insight and the new-improved Prius will lead to a healthy price war that I intend to buy into for my next hybrid vehicle.

 

I travel quite often between the east coast and Indiana and though I do not see as many hybrids as I see in the northeast, I do see more wind generators and more retail biodiesel stations. In fact it seems less regulatory in those states for the permitting of the wind generators than it is here in the northeast. There is a markedly higher number of biodiesel stations in the eastern parts of the midwest with faster expansions than anywhere else in the country.

The midwest also appears to be leading the ways for methane recapture systems/technologies and for geothermal systems.

My impressions are that each sector of our country is addressing their energy needs is alternative ways that are particular to their regions and needs. The end results are for a cleaner tomorrow with domestic alternative products regardless if it is for transportation, heating or electricity.

 

Now I know there are a whole bunch of clever folks on here, but I think this is a bit OTT and brainwashing. The quote refers to SUV's and while I agree they are more polluting than hybrids they are certainly not CAUSING global warming. My money would be on something a little higher than an SUV.

Isn't it pretty obvious that the swift acceleration in melting ice caps has a somewhat high correlation with the number of aircraft in the sky every day all over the world emitting a heap of noxious gases (tech term) ? I suppose a whole whack of CFC refrigerators didn't help either, but most of those are gone, while planes remain. Ditch the planes to show any real progress in global warming. This can be difficult so perhaps a better jet fuel that doesn't harm the atmosphere ?