President Barack Obama promised to put a million more hybrid and electric cars on the road during his tenure, but new research shows drivers are trading them in to buy sports utility vehicles (SUVs).
The auto-research group Edmunds.com found that “22 percent of people who have traded in their hybrids and [electric vehicles] in 2015 bought a new SUV.”
This number is higher than the 18.8 percent that did the same last year, but it’s double the number that traded in their electric car for an SUV just three years ago. Edmunds.com reports that 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,” Edmunds notes.
In recent years, celebrities and politicians have been hyping electric car companies, like Teslas, as a hip way to help the environment and save money on gasoline. The Obama administration and some states even hand out generous tax credits to encourage people to buy EVs.
Buying an electric car can get you a $7,500 federal tax credit. It’s all part of Obama’s plan to get a million electric cars on the road by 2015. But electric cars were much more attractive when gas prices were high and customers could more easily rationalize paying more for an electric car. So far, Obama is still more than 800,000 electric cars short of meeting his 2015 goal.
“That’s the reality of the situation,” Jessica Caldwell, senior analyst at Edmunds.com, told Detroit News. “They have to push them out at those levels for people to be interested. It really seems like the cachet of EVs and hybrids has faded away.”
“EVs are just not selling; even hybrids and plug-ins are slow,” Caldwell said. “There’s some concern.”
Why are electric car sales faltering? One reason is that gas prices are far lower than they were in 2012. Edmunds notes that when gas prices were $4.67 per gallon in October 2012 it would take five5 years to make up the price difference between “a Toyota Camry LE Hybrid ($28,230) and a Toyota Camry LE ($24,460).”
With gas prices now at about $2.27 per gallon, Edmunds.com says it would take more than twice as long to save enough on gas to make up the price difference between a Camry LE and a Camry Hybrid.
Electric cars are also facing increased competition from more fuel-efficient vehicles. Aside from market forces, federal fuel efficiency standards have been forcing automakers to increase the miles per gallon of engines.
Electric cars also suffer from issues with battery life. Each hybrid or electric car battery can cost thousands, or even tens of thousands, of dollars, which only helps tip the economic scale in favor of traditional vehicles.
“It wouldn’t make sense to replace a 12-year old battery with a new battery that’s going to last 12 years, because chances are the car’s not going to last that long,” Eric Ibara with Kelley Blue Book told Detroit News.
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