As gas prices have plummeted, cost savings arguments for hybrid cars took a hit making them a less attractive option.
Bloomberg Businessweek suggested Toyota must hope prospective buyers of their Prius hybrid “don’t pull out a calculator,” since its higher price tag means it takes many years to make it a better deal than other cars. The magazine said [1] Dec. 10, that even though a Toyota Prius consumes less fuel than an economy car like the Chevy Cruze, its price tag is significantly higher.
So Bloomberg Businessweek crunched the numbers and found an owner of a Prius would need to drive the vehicle for 30 years before recouping the extra cost of buying the car in the first place. Bloomberg even factored in the federal tax breaks for purchasing a hybrid, worth $2,500.
Falling gas prices have already impacted hybrid sales. CNBC reported [2] on Dec. 2, that hybrid sales were down 15 percent in the U.S. in 2014, while sales of SUVs and crossovers rose 11.9 percent.
Despite this bad news for hybrid manufacturers, automakers still planned to ramp up production of hybrids. “Hybrids may be struggling a bit right now, but automakers are not changing their plans to build those vehicles,” Michael Robinet, managing director of IHS Automotive Consulting, told CNBC.
That was at least partly because of tougher fuel-efficiency requirements in the U.S., finalized [3] by President Barack Obama’s administration in August 2012. These regulations require automakers’ vehicle lineup to meet an average efficiency of 54.5 miles per gallon by 2025.