Edmunds Research: Gas Prices Still Sway Interest in Hybrids and Alternative Fuels
Is Now the Time for A Gas Tax to Help Americans Revolt Against King Petroleum?
By John O'Dell, Senior Editor
Gasoline burners still rule, but interest in hybrids and diesels is climbing along with summer fuel prices, and an impressive number of shoppers are looking at flex-fuel trucks.
Those are the chief findings of just-completed research into the kinds of vehicles Edmunds.com users are researching these days, and it underscores the close tie between gasoline prices and the "green-ness" of the auto market.
As long as the prices of diesel and hybrid cars and trucks remain significantly higher than those of their conventional gasoline counterparts, the level of interest in the alternative models is likely to stay well below interest in gasoline vehicles.
Tipping Point
But as gas prices rise, the payback for hybrids and diesels drops and interest levels creep back up the charts.
Anything to take away some of that pain at the pump seems to be the mantra of many car shoppers..
That's what David Tompkins. Edmunds' executive director of business solutions, found when he and his team looked at the percentage of Edmunds.com users researching the various type of vehicles over the past 18 months.
Tompkins specified "researching" rather than "browsing" because people researching a vehicle are more likely to be buyers than the people who, in the real estate market, would be called "lookie-loos." It's a key difference that some analysts haven't caught onto yet.
Comparing levels of interest shown by shoppers in June of '09, Tompkins found more than twice as much research into hybrid models than into diesels, 9 percent versus 4 percent.
Electric cars and natural gas vehicles didn't register at all, given that the number for sale in the U.S. is so small, but the data suggests that if there were a number of vehicles available - cars and trucks that didn't need gasoline at all - interest in them would soar with fuel prices.
After all, when gas prices were above $4 a gallon last summer, interest in gas vehicles dropped to 84 percent while 26 percent of shoppers researched hybrids, the only significant alternative in the market at the time.
Hybrids began dropping out the picture as gasoline prices fell and by December accounted for only 4 percent of shopper research on Edmunds.com, while gas-burners were back up to 96 percent.
Now, as gas starts what most analysts believe will be a steady upward climb, research into hybrids is rising, hitting up to 9 percent in June.
Gasoline vehicles fell slightly to 93 percent last month, while 4 percent of research in June was directed at diesel vehicles. (The numbers exceed 100 percent because of overlapping research by shoppers who research more than one type of vehicle when trying to select a fuel or powertrain type).
By Segment
Among luxury makes in June, the data shows research into diesels and hybrids was equal, each drawing 5 percent, while for non-luxury brands hybrids jumped to 9 percent and diesels fell to 4 percent.
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Hybrids such as 2010 Toyota Prius are leading alternatives when gas prices rise.
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In the pickup segment, flex-fuel - typically trucks capable of using either gasoline or ethanol - accounted for 16 percent of research compared to 2 percent for diesel and 1 percent for hybrids.
SUV shoppers favored hybrids among the alternatives to gasoline, with 8 percent spending time researching gas-electric models while 5 percent looked into flex-fuel and 3 percent checked out diesels.
Truck researchers' interest in gasoline vehicles in this, the most fuel-gulping of all categories, was the lowest of any segment but was still at 91%, while 1 percent looked at hybrids and 2 percent researched diesels. Flex-fuel models, though, were researched by an impressive 16 percent of truck shoppers.
Among minivan shoppers, 98 percent looked at gasoline models while 2 percent researched diesels, the only alternative open to them.
Gasoline models interested 92 percent of car and SUV shoppers doing their research on Edmunds.com
Overall, 93 percent of shoppers look at gasoline-fueled vehicles, while 6 percent limited research to hybrids, flex-fuel and/or diesel vehicles.
What a Difference
That was last month, with regular-grade gas at a national average of $2.48 and diesel at $2.55.
Last June, with gasoline at $4.11 a gallon for regular and diesel at $3.33, things looked a lot different.
Only 84 percent of those researching new vehicles on Edmunds.com were looking at gasoline vehicles, while 26 percent were researching hybrids. Diesels - there were fewer in the market then - accounted for only 1 percent of the research.
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Volkswagens' Jetta TDI has sold consistently well since its introduction, but overall interest in diesels in the U.S. is slight. It ratchets up, however when the gas prices rise and the gap between gasoline anddieel fuel prices closes.
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Among those researching luxury vehicles a year ago, 4 percent were looking at hybrids (that's four points lower than last month), 2 percent were interested in diesels (versus 5 percent last month) and 97 percent looked at gasoline vehicles.
That high level of interest in gas cars and trucks just shows that even at 4.11 a gallon, gas prices weren't much of a factor for those still actively shopping in the luxury car segment.
Seeking Relief
In the non-luxe segment, however, Edmunds shoppers' interest in gasoline vehicles dropped to 84 percent and interest in hybrids soared to 29 percent.
In the car segment, luxury and non-luxury combined, gasoline vehicles interested only 81 percent of shoppers, while 25 percent looked at hybrids.
The numbers for gas and hybrids were identical in the SUV segment, at 81 percent and 25 percent, but there was measurable interest in diesels, at 1 percent, while 3 percent looked at flex-fuel SUVs as well.
In trucks last June, research ran 96 percent gas - again the price of fuel didn't seem to matter much - 6 percent flex fuel and 2 percent diesel, with no measurable interest in the few mild hybrid trucks in the market.
Lockstep
It all goes to show, said Tompkins, that "as gasoline prices increase, research in hybrids also increases. That number fell to only 4 percent in December, when gas prices hit their low point for the past couple of years."
But as gas prices have risen recently, he said, "hybrid research has gone up again, to 9 percent."
The same is true of diesels, although there it's the gap between gas and diesel fuel prices, more than the price itself.
Research into diesels has climbed steadily - helped also by an increase in the number of diesel vehicles offered in the market - from less than 1 percent in the first half of 2008 to 4 percent last month.
Even in the pickup market, where soaring fuel costs already have run off all but the most dedicated truck shoppers, gas prices still matter to many who are looking.
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2009 Chevrolet Siverado FXE uses gasoline or an ethanol-gasoline blend.
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Only 1 percent were researching hybrids last month, a level unchanged since January, but 16 percent were researching flex-fuel trucks, looking for a way to reduce their dependence on gas even if not overly concerned about prices. Diesels have stayed steady with 2 percent of the truck market research all year.
Opportunities
For smart car shoppers who believe gas prices are going to continue to climb, the numbers show that competition in the market for alternative fuel and hybrid vehicles is likely to grow and that such vehicles are likely to retain higher levels of resale value than many gasoline vehicles,
For policy makers, the data supports what many in the green car field have been saying for several years:
If it really is federal policy is to get American drivers off of gas and into vehicles that are less polluting and more fuel efficient, then now is the time to begin debating measures such as a gas tax hike to create a "floor" to keep the price from falling and to encourage demand for hybrids, electric vehicles, fuel-efficient clean diesels and non-petroleum biofuel
- Posted by
- John O'Dell July 20, 2009, 2:00 AM
- Permalink
- Categories:
- Alternative Fuels, Biofuels, Diesel, Ethanol, Flex-Fuel, Hybrid, Plug-ins and Electric
- Technorati Tags:
- Diesels, Flex-Fuel Trucks, Gas Prices, Hybrids
Perhaps instead of taxing gasoline to increase the price to increase demand for alternative fuel, maybe there should be more alternative fuel vehicle options actually available and on the road, so people can make up their own mind instead of feeling coerced and overtaxed.