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$1 gas price rise big for small-car sales, not hybrids, electrics

February 08, 2013|By Ronald D. White
  • Toyota's Prius hybrid is the bestselling car in California, but Experian Automotive says sales of small, conventionally powered cars would rise faster across the U.S. than sales of hybrids and electric vehicles during a $1-a-gallon gasoline price increase.
Toyota's Prius hybrid is the bestselling car in California, but Experian… (Bill Pugliano / Getty Images )

You might think that a $1 increase in gasoline prices would result in a big boost for the sale of hybrids and electric vehicles. Not so, according to a new report by Experian Automotive.

The Schaumberg, Ill., group says sales of small gas-powered cars would climb quickest, while sales of some hybrids would actually fall during such an increase.

Experian said the results were gleaned in part from a study on the effect of rising fuel prices on various vehicle segments over a five-year period.

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The research, Experian said, showed that there was a direct correlation between fluctuations in gas prices and changes in market share for different types of vehicles.

Experian's analysis is based on what they called an average month of 1 million in motor vehicle sales.

In such a month, a $1-a-gallon increase in gasoline prices would boost sales in the small-car economy segment 0.7%, or about 7,000 vehicles, the report said.

Sales of hybrid cars, which normally sell at a rate of about 20,000 to 40,000 units a month, would grow just 0.2%, or about 1,000 cars.

Electric-vehicle sales would grow an even less -- just 0.1%. And that's already on a tiny base. The electric-car market currently accounts for just one-tenth of 1% of U.S. auto sales. The Nissan Leaf is the bestseller, but Nissan has sold just 20,000 in the U.S. since the Leaf's introduction in late 2010. (Americans purchased 14.5 million vehicles last year.) 

Erik Hjermstad, lead analytic consultant for Experian Automotive, speculated in an interview that the main reason smaller, mostly gasoline-powered cars would benefit more than hybrids during a fuel price spike is that they cost less.

"The hybrids don't have that going for them yet," Hjermstad said. Similarly, electric-vehicle sales "could go up a lot faster if they can be cheaper and have longer ranges" in the number of miles they can travel on a single charge.

In the Experian study, sales of alternative-powered hybrid trucks actually fell during the test price spike.

"They are still trucks. Better than non-hybrids in fuel efficiency, but only to a small degree," Hjermstad said.

Another finding of note in the Experian report: Sales of "upscale/ultra" vehicles wouldn't change at all during a $1-a-gallon price spike.

Among those buyers, perhaps the likely reaction would be "What spike?"


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