What's Wrong With This Picture: Fuel Prices Versus Hybrid Sales Edition

Edward Niedermeyer
by Edward Niedermeyer

The Alliance of Automobile Manufacturers is taking to the internet ahead of a forthcoming increase in 2017-2025 CAFE standards, with a website called “ Consumers and Fuel Economy.” There you can find, among other things, this graph detailing the relationship between hybrid sales and fuel prices over the last three… summers? Did the fall and winter data not support the AAM’s goals? If so, and this graph has been constructed for maximum impact, it’s hardly a wildly convincing slice of data… or is it?

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  • John Horner John Horner on Jun 08, 2011

    This graph demonstrates what marketers have known for a long time: The "rational man" hypothesis which underlies the vast majority of economic theory is a bad hypothesis. People generally do not make rational decisions.

  • NulloModo NulloModo on Jun 08, 2011

    So, early in the summer of 2008 hybrid sales were at record levels (makes some sense, gas was fairly high, carmegeddon wasn't in full swing yet, and GM was still building their fairly inexpensive BAS mild hybrids. There were also still tax incentives left on a number of hybrid vehicles during this period). Carmeddon struck sinking sales towards the end of '08, not to have them shoot back up until Cash for Clunkers suddenly made hybrids and other fuel efficient vehicles very desirable in the summer of '09. Lower gas prices and no Cash for Clunkers incentives left '10 numbers in the dust. The '11 numbers are the biggest mystery, as gas prices are back up, but the sales are still diving. I'm guessing it could be supply related, we haven't been able to get a Fusion or Escape hybrid on the lot in months, and Toyota/Honda dealers are likely charging full sticker or above for their offerings in the wake of the tsunami.

  • VanillaDude VanillaDude on Jun 08, 2011

    This is reality. Hybrid lovers just don't want to accept it. There are differing rational reasons when purchasing a vehicle. Thinking that how a car is powered or believing that the cost of gas dominates everything else in purchasing a vehicle is wrong. (See graph above!) People are rational. You just don't understand or respect their rationale because it doesn't fit yours. Grow up! People are different and you don't know everything. Deal with it. Believing that your rationale is superior to other people's rationale is frankly too arrogant to address here. Believing that people are irrational is irrational. Evolution and thousands of years prove that human beings are rational. Ever live in another culture? If you did, you will realize your limited understanding of how people prioritize and make decisions. People ain't stupid! Will hybrid sales increase with higher prices of oil? Not necessarily. (See graph above!) Will hybrid sales increase when hybrid cars are as cheap as other cars? Perhaps. Since this isn't the case - we don't know. What we do know is that hybrid car sales will increase when every vehicle is a hybrid. Oh, and we also know that gas prices haven't had an effect. (See graph above!) The way the economy works is when gas prices at the pump go up for reasons other than the diminishing power of the US dollar, then it becomes more profitable for people to get oil from more expensive extraction methods. We aren't running out of oil, just oil at below $100 a barrel. The price increases aren't because of scarcity.

  • Wallstreet Wallstreet on Jun 08, 2011

    Why is the graph running from March to August only? Could the sharp decline since March 2011 due to supply constraints as a result of Tsumani?