Hybrids and EV Automakers May Experience Low Sales This Year
Analysts who attended an event hosted by Cox Automotive on Monday believe that this 2015, makers of hybrids and electric vehicles may struggle with their sales. This is mainly due to the falling gas prices around the world. Another factor that contributes to this prediction is the improving fuel economy among petrol-powered cars and trucks, with the average increasing from 20.9 miles per gallon in 2007 to 25.5 mpg in 2014.
Karl Brauer, auto analyst from Kelley Blue Book, said, “The biggest threat to the electric vehicle is the gasoline engine.”
Over the next several years, car manufacturers will continue to find ways to increase fuel economy in gasoline engines. For most consumers, vehicles with more than 30 mpg are much better than what they were driving before.
According to AAA’s Fuel Gauge Report, every day for over three months now, gas prices have continuously dropped. In fact, they’re at a national average of just $2.3 per gallon. Experts predict, however, that gas prices will increase over time, but will remain low for most parts of the year.
Hybrid and electric vehicle sales last year fell by 8.8 percent, according to Hybridcars.com. Toyota Prius sales dropped 11.5 percent last year while Chevrolet Volt sales fell by 18.6 percent. Kelley Blue Book – a reference book listing the prices of used cars – stated that automakers were forced to offer more incentives by more than $3,000 for hybrid cars and by $4,000 for electric vehicles last year.
Eric Ibarra, also an auto analyst for Kelley Blue Book, said, “Automakers are spending $10,000 per car to get these vehicles sold. It will only get more difficult with gas prices as low as they are.”
Michelle Krebs, one of the many analysts who spoke at the industry breakfast event organized by Kelley Blue Book and Cox Automotive in Detroit, said, “It’s going to be a really tough market.”