WSJ: Toyota's Prius Pays Price for Cheap Gasoline

dead on.

 

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TOKYO—Toyota Motor Corp.’s latest Prius has a problem: gasoline prices.

When the Prius first went on the U.S. market in the late 1990s, it was a hit among celebrities like actor Leonardo DiCaprio who flaunted their environmental bona fides with the hybrid gas-electric car.

The latest version, which hit roads in December last year, is more fuel-efficient than ever, getting 54 miles to the gallon. In Toyota’s TM, -1.26% home market of Japan, it tops the sales charts. But it is struggling in the U.S. as relatively cheap gasoline prices dent the car maker’s strategy of presenting itself as the leader of an environmentally-friendly future—with the Prius as the vanguard.

U.S. sales of the Prius are down 26% this year through August.

 

I believe you can get around WSJ's paywall by simply using incognito mode in Chrome. Anyways, here is the .txt from the article. I'll try to include their fancy graph as well, but please forgive any copy/paste errors I make like missing characters or spaces.

 

Hmmm.
I hit a paywall, so I didn't read the article, but it's a wash-rinse-repeat of other articles that bemoan cheap gas prices.

I loaded fuel yesterday at $1.80 (Murphy) and I'm not sure that two dollar a gallon gas is "cheap."

I haven't crunched numbers on the G4 yet but I'm not seeing similar articles with Tesla....Volt....Ford...BMW.....Mercedes...etc.
In fact, it would seem that the number of hybrid, PHEV, and BEV vehicles in the world fleet have expanded greatly since the days when Hollywood A-listers and the eco-chic drove Priuses.
MY thoughts.....(current street value = < $0.02/adjusted for inflation)
The Prius is still MPG champ for wireless cars, but the center of gravity for the bunny hugging crowd has shifted away from gas-only vehicles, and this trend will accelerate as more BEVs and PHEVs hit the ground.
For hypercommutters there's just not enough working space between the Civics and Corollas of the world and bottom shelf PHEV's to justify a G4's price and the F-117 front end combined with the Amy Whinehouse rear end isn't helping much with older drivers.

Yeah.
Toyota is trying to break up the boring, geeky Prius stereotype, and I give them due credit for that, but they're niching themselves out of the market.
If you drive a Prius enough to cost-justify the additional coin, then the car will be worth roughly $4.56 in 8 years, and if you don't - then the automotive world is crammed full of alternative small-to-midsized cars....including many with the "me-too" hybrid emblems.
This has been the case since 2000 but SINCE then gas prices have been up and down through several cycles that really haven't affected Priuses global sales.

Two things are different now:
1. Competition. The ech chic aren't driving hybrids these days. They've gone full electric - or at least PHEV.

B. The Prius itself. Priuses used to sacrifice everything at the altar of fuel efficiency. Comfort, Styling. Performance....so much so that people like me were throwing rocks at them for single-mindedness. Like I said earlier.....they're still the gas champs, but they're also trying to be fun to drive AND cool.
This drives prices up a bit (more.)


Current G4 drivers should be comforted by the fact that there WILL be more gas price spikes.
Until then?
$2 gas still isn't cheap enough to waste.

 

You lot over the pond are so funny.

Current price here with us is about £1.08/litre, which works out at about $5.47 per US gallon I think!

I love my Prius.

 

hasn't petrol been the same price over there for a hundred years? maybe even cheaper today than ever?

 

It is cheaper than it's peak back in 2012 - when it was hitting over $7/USgallon. But generally the price has been increasing over many years - a lot of the price is due to government taxation policy.

 

This article is spot on in my area.

I can't believe how many huge ( and expensive ) pickup trucks there are around here now. I just don't know how people 'justify' buying a 40-50K truck because 'gas is cheap'...but they do.

The used car dealers love this though. I purchased our used 2010 Pruis at a dealer where many folks were/are trading in small cars for large pickup trucks and SUVs. The used car manager admitted that they love the "gas price cycle". I'd be willing to bet that the 'cycle' will start again sooner than we think.

The good news is it seems to be a buyers market for both new and used hybrids. For example, I'm absolutely amazed at how low the prices are on used Prius Plug-ins and Volts...and the regular Prius for that matter.

 

+1

The lowest price you can get in Munich 1L of gas for the Prius is, right now as I type, 1,208€/L - or at today's Xrate, 1.34802$/L, which equates to 5.1$/gal. It is "cheaper" than usual, but back when in Germany it was 1.5€/L (and 1.8€/L in Italy where my parents live), that is 7-8$/gal (you do the math), you don't want a car that spews unburnt fuel from the exhaust. (not to mention the higher taxes because it pollutes more).
As my signature says, I'll drive what you want, if you pay my gas.

In general I find that having an SUV is questionable in any case. Almost pre-historical.
A lot of frustrated drivers (women included) behind the wheel of big cars (literally) to compensate for other smaller things, it seems.

That being said, the sales numbers of the Prius in August are actually higher than those in July in the USA (Toyota Prius Sales Figures - GOOD CAR BAD CAR) and constantly increasing since Jan 2016.

I also don't understand all this argumentation about the Tesla. Which is 30k€ (and $$$) more expensive than a Prius. And even model 3 will still be at the very least 10k€ more expensive that a Prius today. It is simply like comparing a VW to a BMW. 2 different audiences and 2 different price levels.
And all the bragging about "so many other BEV, PHEV and hybrids" out there. Sure - the only thing I see here are PHEV and Hybrids of Toyota (Yaris and Auris); BEV if I see a couple of Renault Zoe's and Twizy's (a scooter in fact) is a miracle; a couple of Leafs and a couple of Teslas (and Munich is a rich city). If I see an hybrid, it is a Prius.

I don't see any VW GTE, Ford's whatevers, or other "hybrids" from other companies here in Munich, or in Germany/EU for that matter. I see instead a lot of diesels and cars with old tech that can hardly do a "start stop" at the traffic light. Because you have SUVs, we have traffic jams like no other. And your fuel efficient diesel, is not so efficient stuck in city (or highway!) traffic jams...

In the USA, btw, trucks and SUV have always sold a lot, regardless of fuel price. If the fuel price is low, those who buy SUVs and trucks, are still buying them, and have the money to do so. And those are a lot of people.
The "problem" is those who don't have that kind of money, see a low gas price, and buy/lease/whatever an SUV they will not be able to sustain when the prices of fuel go up again.

I still remember when I saw back in 2008, while in the USA for a biz trip, on a TV news program, a mum with one (!!!) kid, lamenting she had issues with her finances and fuelling up her SUV because of the "really high" gas prices to take Jimmy at the park, "and all of his toys".
Hey lady!? How about having a normal car, like the ones used by millions of mums elsewhere, and stop dragging the entire home in an SUV for no reason at all? And complain about high gas prices? The problem is not the gas price, is the "car" you drive!
(BTW, the same argument with "hey dad!")

 

Gas prices go up and go down. I'm paying three dollars a gallon where I live. Yes, it's a tourist town and it is still summer time. So we always pay a premium here. Everyone here drives pickups or SUV's. But you pretty much need a truck here to take garbage to the dump, get firewood (yes I'm still in the stone age), get fencing, pull the cargo/horse/whatever trailer, load up the clearing equipment for yearly tuneups in town, and lots of other stuff people do on ranches.

I didn't get the Prius just for the gas mileage though. Yes it was my in the top three of my priorities, but I wanted to get a car with cool technology first. But yes, mileage will count when the gas prices peak again. If we all bought hybrids, it would stay cheap.

 

Sort of hinting at what we've been observing, somewhat of a departure between Japan and USA needs. Also let's face it we must have 10-20x as many car models for sale here compared to Japan so there is enormous slicing of the sales pie.

 

Funny how different markets buy different things. I can't throw a stone from my office window without hitting a Tesla Model S. I see a good number of those hybrid ford c-max (not many of the energi's though), hybrid tahoes, yukons and escalades, it's a guarantee that I'll see at least two leafs (leaves?) on my commute home. There are a couple of Volts in our parking lot, but I don't see many on the street. My boss rides some electric scooter to work every day. I'm really curious to see how the Bolt does around here when it goes on sale, but I think unless gas prices go up it will be another failure for Chevy. Of course I see a huge number of previous generation prius, but only have seen a handful of Gen 4.

Different areas have different requirements. I believe Americans drive longer distances than those on the other side of the pond and I think once you cross the Mississippi those distances get even greater. I want a bigger car than the Prius when I'm not commuting. I took the Prius 800 miles in a day and it did it, but I was not happy and ready to get to work when I got out of it. When I do the same trip in the SRT Charger it's a different experience. The Charger loves going 80+ mph on the open road and after 800 miles I can step out and go straight into a presentation feeling rested without any issue. I'd say I can be almost perky when I get out of the Charger after 800 miles. The Charger is just the much more comfortable car for those long drives. The Prius can do it, but it takes a toll on me.

 

I'm worried about my two 800 mile days I'll ride each year in the new Prius. I know it won't be as easy as before. The seats are firmer and I really haven't had a chance to get the car up above 70 miles an hour yet. On my long drives there are sections where the speed limit is an insane 85 mph and if you don't drive that fast, you are battling the truckers for road space.

 

If one needs a truck/pickup because he lives in the "sticks" and has a lot to move around, so be it. I agree with you.
That is also where the typical "US truck" comes from.

All my comments come from observing those who (also here in EU btw with big engine cars), pretend they need one, and if fact they don't... and live in Suburbia at most, not on top of a mountain.
BTW I live close to the Alps and there are a lot of people who live "in the sticks" - still they might have a station wagon at most, but almost none have an SUV or a truck - how come?...

 

hycam is very comfortable on long trips, and we average 40 mpg going to florida.

 

Last I knew taxes in Europe accounted for over 65% of the cost of a litre of petrol. Has that changed significantly? When that was removed from the equation, prices were nearly the same. In the US, the federal tax is 18.4 cents per gallon, then state taxes add even more. Cheapest state gas tax is Alaska at 12.25 cents per gallon all the way to 51.6 cents per gallon.

Below is a chart breaking out the component costs for a gallon of gasoline obtained from
Factors Affecting Gasoline Prices - Energy Explained, Your Guide To Understanding Energy - Energy Information Administration

 

The question is - how often do you drive those 800 miles? and how often will you get out of the car after such a long drive for a presentation? why not a more efficient (at least time-wise) airplane then?
And I have to drive 400+ miles 2-3 times a year back home, and 80mph can be the average sure, but not when last time I had 3 hrs extra of traffic jams on my already 7hrs (pauses included) long drive. And I got out of this Gen4 quite ok (way better than Gen3 btw). And an average 45mpg.
And the Prius fairs really well at 100mph too btw. But again, how often in the lifetime of the car will I, or can I (traffic jams everywhere on the highways here, and there too BTW - right ), do it? for how long on a stretch?
So rarely that any other car that is butter smooth in that situation, but a total drag in 90% of the time I need to use the car, will make no sense.

So the question is - would I have had a better experience in a more comfortable car driving those 10hrs (or the 7hrs average I need)? likely. Would had been worth it (renting it and the extra fuel only for those trips) - I doubt.
It would also not have saved me any time and any traffic jams, where the Prius instead is a pleasure to drive.

 

About 70% in Germany - even higher in other EU countries (about 80% in Italy for example):
http://bilder.t-online.de/b/76/70/84/40/id_76708440/610/tid_da/so-setzen-sich-die-kraftstoffpreise-zusammen-.jpg
(the top part "kosten & gewinnen" are the costs of fuel plus the margin of the oil companies - everything else below is taxes)
It is calculated that even if the gas had cost 0€ we would still have to pay 0.92€/L to the state.... Welcome in the EU.