By on June 7, 2011

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?

Get the latest TTAC e-Newsletter!

23 Comments on “What’s Wrong With This Picture: Fuel Prices Versus Hybrid Sales Edition...”

  • avatar

    That chart would be much more informative if it showed sales as a function of prices, not the month… I can’t take much from it in its current form.

  • avatar

    Also, they’re completely ignoring any tax credits or incentives (even manufacturer incentives) on the hybrids. A lot of eggs go into this omelette, let’s make sure we’ve accounted for them all before we go taking our cholesterol test.

  • avatar

    That graph tells me:

    1. My assertion that Americans will pay anything for a gallon of fuel is correct. Price vs qty is largely inelastic.

    2. The novelty of hybrids is past, and now consumers are beginning to calculate the payback of the ‘hybrid premium’.

    3. 2009’s numbers are a function of Carmageddon and Cash for Clunkers.

    4. Inflation-corrected fuel prices by year should be on the X-axis, while hybrid sales should be on the Y-axis, and the data should be year-round. That’s one of the weirdest graphs I’ve seen.

  • avatar

    There is a Ram ad running across the bottom of it, that is what is wrong with the picture.

    More than gas price affects car purchases. Like has been mentioned, incentives, the economy, fuel efficient competitor, all of these will affect sales as much as gas prices.

  • avatar

    The way those years are arranged by left to right at the top there would lead you at first glance to think the x-axis is arranged oldest to newest by year, where 2008 is at the far left of the graph, and 2011 is all the way to the right. Which is, of course, the only sane way to lay out this particular data in a graph if you want it to be comprehensible. The only conclusion to be drawn is that whoever designed the graph most certainly did not want the data to be comprehensible, and the apparent month range shopping and unclear fuel cost scale backs that up. I mean, it makes you wonder how damning the raw data is to their argument to produce this tortured of a slide to present it.

  • avatar

    Americans still have really cheap gas compared to income when gas gets to $10per gallon you can moan but not before.

    • 0 avatar
      George B

      If government attempted to impose European levels of taxation in the US, smuggling of untaxed gasoline would replace drugs as the most lucrative organized crime business.

  • avatar

    Quite possible the least informative graph ever.

  • avatar

    All that graph shows me is that The Alliance of Automobile Manufacturers has absolutely no idea how to make a graph. My 14-month old can do better with sidewalk chalk, and she mostly tries to eat it.

    On the topic of Hybrid Sales vs. Gas Prices – big waves aside, there’s a correlation. I’d been watching the prices through the various Zag best-car-deals for the past year or so on a lot of models, and the best out-the-door price on a Prius seems directly correlated with gas prices. Right now the best price is ~$500 OVER sticker, whereas not too many months ago their best price was over $2000 UNDER sticker.

    Granted, pricing does not always mirror sales, but it says a lot about demand – which in some ways is a better indicator of . . . well DEMAND . . . than sales is.

  • avatar
    The Walking Eye

    A spreadsheet that is the most complete I’ve found in my searches. Total yearly sales peaked in 2007, before we had any large gas spikes. But the decrease has coincided with a large decrease in total car sales.

    Hybrid car % decrease year to year
    2007-8: -11.3%
    2008-9: -7.1%
    2009-10: -5.3%

    Total car sales % decrease year to year
    2007-8: -18%
    2008-9: -21.2%
    2009-10: +11.5%

    The first two years hybrids didn’t decrease at the same rate. But quite a bit different with ’09-10. I would guess price was the largest factor coupled with more regular ICE vehicles available with 35+ mpg since there is that initial upfront extra cost. I’m still buying a Prius when my lease is up.

  • avatar

    This graph makes no sense. Demand is largely inelastic with respect to cost. A wiser society would use this knowledge to form a tax system – you should tax things you don’t want and tax things where the tax does not change behavior. I don’t think taxes change how much people work, but we have, with gas prices, pretty good proof that gas prices don’t change consumption. It’s the perfect thing to tax. Far fewer points of sale too, compared to the number of people working…

    • 0 avatar
      M 1

      Why don’t you move to one of those wiser societies and leave me out of your authoritarian fantasy of punishing me until I do what you think is best?

      (And yes, that graph is god-awful.)

  • avatar

    I know this is going to sound crazy and all, but the immediate current price of gas isn’t the only factor in whether or not people buy a more fuel efficient vehicle. You wouldn’t know it by looking at our news cycle but some people can actually remember events that occurred several months or even years ago.

    So someone who couldn’t afford a new car (or wasn’t in the market anyway) when the economy was defecating itself back in mid-2008 and gas was peaking around $4.10 might, when they have more money/credit and/or need a new car to replace one that’s going out of service, might remember that fuel was really expensive, even though when they’re buying a car in 2010 it’s temporarily down to $2.80 or whatever. (And hey, then it went back up! Who would have predicted that, other than everyone who was paying any attention?)

    Also, like someone else said, the graph, in addition to inexplicably omitting several months of each year, fails to take into account what percentage of cars being sold are hybrids, instead just giving the raw number. I wonder if more people bought new cars in March 2008, when anybody with a pulse could get a car loan, than in March 2009, when lenders were jumping out of skyscraper windows.

  • avatar

    As some have pointed out, gas prices don’t even explain gasoline consumption. I’ts price inelastic, and prices are explained by demand changes and the business cycle. Given that the turn over for car ownership typically takes several years, at best you would see a very small coefficient for gas price. You certainly are not going to see an effect in a single summer.

    Also we have to remember that this inelasticy comes in the face of massive price variation by as much as $2.51 in the past 6 years.

    And yes this is the worst graph ever made.

  • avatar

    The graph does make sense if you think about it a bit but it has no real value because it does not compare these sales with “normal” cars. I think Hybrids are expensive for what they are and most buyers opt for more standard, tried and tested technology when there is economic stress, as there was. So even with high gas prices, people will shy away when jobs are at risk.

  • avatar

    Not that I don’t like visual representation, but where are the correlation statistics? (I’m too lazy to recreate the data)

  • avatar
    John Horner

    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.

  • avatar

    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.

  • avatar

    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.

  • avatar

    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?

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Oberkanone: I’d pay $10,000 for the little trucklet.
  • Oberkanone: Fiber Reinforced Panels?
  • Mike A: Do you know anything about demand and supply and the supply chain issues. The price increases are in part due...
  • Imagefont: I rented a Wrangler Unlimited for a week, my wife and I (plus the dog) went to Santa Fe and put just shy...
  • ajla: They delivered it? Congratulations.

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber