It wasn’t long ago when everyone was frantic to trade in their large, inefficient cars for hybrids. Gas prices were at record highs and owning a gas-guzzling SUV was suddenly a much more expensive proposition. Hybrid sales boomed, but gas prices are back down and this doesn’t bode well for hybrids. Toyota said they expect it to hurt sales of their all-new Prius, the darling of the hybrid world.
It’s a bit of bad timing that the release of the next generation Prius comes as gas prices fall. The incentive to trade an existing car for something more fuel efficient is no longer there and the cost justifications have disappeared. Sticking with what you’ve got parked in the driveway or buying a fuel efficient gasoline sedan makes sense.
Toyota recognizes this challenge and they expect it will negatively affect sales of the Prius. According to Autoblog, Toyota expected the Prius to sell 300,000 to 400,000 units worldwide per year. They’ve revised that number down to 300,000 to 350,000 so the top end has had a chunk shaved right off.
The price of gas in the US is now where it was back in 2007 and there’s a chance prices could continue to drop even further. Although this cheap gas is overall a good thing for the car business, making it more affordable for people to drive more often, it’s not good news for green cars.
It’s already take a toll with deliveries in the segment down by 17 percent this year. The last generation Prius showed a 12 percent drop over last year through November doing only slightly better than the rest of the segment. The next generation Prius is due to go on sale in the US next month and might not be the hit once hoped.
This could go either way for Toyota. Overall, the green segment is down, but the Prius still has a rabid fan following. It looks better than before and it drives better than before, possibly piquing interest from those who would have snubbed it in the past.
It also has impressive fuel economy with the new Prius Eco delivering 58 mpg city and 53 mpg highway. No matter how cheap gas gets, that’s going to save owners some money, especially if they have long commutes. It makes the Prius not so much of a tough sell, especially with the possibility that gas prices could go right back up just as fast as they came crashing down.