Falling gasoline prices have made the cost-benefit proposition of owning a hybrid more tenuous as it now could take owners nearly twice as much time to break even on the price difference between a hybrid and non-hybrid vehicle, according to Edmunds.com.
The analysis compared the 2012 national average gasoline price to the current national average. It would take five years for fuel savings to pay for the $3,770 price difference between a Toyota Camry LE and Toyota Camry LE Hybrid with a national gas price of $4.67 per gallon, according to the research. At today's national average gas price of $2.27 per gallon, it would take 10.5 years to close the same gap.
This could be a reason to why many owners of hybrid and battery-electric vehicles are trading in their alternative fuel vehicles for gasoline-powered vehicles, according to Edmunds.com.
The report found that 22 percent of people who have traded in their hybrids and EVs in 2015 bought a new SUV. As gas prices decline, the percentage of people trading in their alt-fuel vehicles is growing. In 2014, 18.8 percent of people traded in their hybrids and EVs for another vehicle.
"For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment," said Jessica Caldwell, Edmunds.com director of industry analysis. "Three years ago, when gas was at near-record highs, it was a lot easier to rationalize the price premiums on alternative fuel vehicles. But with today's gas prices as low as they are, the math just doesn't make a very compelling case."
Overall, only 45 percent of this year's hybrid and EV trade-ins have gone toward the purchase of another alternative fuel vehicle, down from just over 60 percent in 2012. Never before have loyalty rates for alt-fuel vehicles fallen below 50 percent.
When it comes to sales alt-fuel vehicle sales, hybrids are faring well, but overall sales are down from the previous year. Through September, hybrid vehicle sales increased, but the percentage of total sales at 2.88 percent was less than the previous year’s 3.32 percent, according to data from www.hybridcars.com. Plug-in hybrid and EV sales increased slightly in 2014, but still made up just over one-third of 1 percent of total sales.
Factors impacting the sales of alternative-fuel vehicles include the lower cost of gasoline, improving mpg of new gasoline-powered vehicles, and the higher cost of alternative fuel options, Black Book's Ricky Beggs told Automotive Fleet.