No Joy In July's Hybrid, EV Sales Bump
By John O'Dell August 4, 2011
Improving inventory from Japanese automakers recovering from the disastrous earthquake that curtailed production for much of the second quarter helped the struggling electric-drive market in the U.S. regain some of the ground lost in June – its worst month for sales in six year. But the "recovery" did little to make the advanced-technology segment sparkle. Indeed, collective market share for the 29 hybrids and two battery-electric vehicles that make up the segment remained below 2 percent for the third consecutive month. Were it not for Toyota, there'd barely have been a July hybrid market to track.
Consumers bought 17,930 hybrids and EVs in July, a 21 percent improvement over June but still down 24 percent from a year earlier. In contrast, conventionally powered cars and trucks posted an overall sales hike of 1.8 percent from July 2010, largely because of increased sales of new small and fuel-efficient cars such as the Chevrolet Cruze that can compete against many hybrids, especially in pricing. The differences are a strong indication that the technology premium that boosts the price tag of most advanced-tech cars and SUVs doesn't play well in a soft economy. Indeed, one reason Toyota's Prius continues to outsell all other vehicles in the segment by a huge margin is that it doesn’t have a conventionally powered counterpart to continually remind consumers of how much more they have to pay for the batteries and electric drive systems that add to the cost of hybrids and EVs. The sporty upscale Lexus CT200h (above), a relatively new addition to the Toyota corporate hybrid stable and another model without a direct comparison in the conventional powertrain market also has been doing well –1,553 sales in July made the hatchback the No. 2 hybrid in the country.
Gradually increasing gasoline prices might help boost advanced-tech vehicle sales in coming months -- Edmunds.com analyst Ivan Drury said he believes that's the case -- but economic uncertainty as a dysfunctional Congress wrestled with the federal debt ceiling before reaching agreement on the last day of July trumped fuel cost worries in most cases. Among companies that were selling electric-drive vehicles in June 2010, only Toyota and Nissan posted gains for the same month this year. Only nine of the 32 cars and SUVs in the advanced-drive segment in July posted gains over June, and seven of those were Toyota and Lexus models. Nissan made the grade only because deliveries of its new Leaf EV, slowed for several months as a result of plant damage sustained in the March earthquake, have finally picked up again. Indeed, said Drury, unblocking the delivery pipeline from Japan to the U.S. has "tossed a vital life preserver to the advanced-drive market."
Hyundai: Surging
One of the few non-Toyota bright spots in the July data was provided by Hyundai's new 2011 Sonata Hybrid. The South Korean automaker resolutely refuses to break out its hybrid sales, but Edmunds.com has been able to begin tracking monthly registrations, which closely correspond to sales - and that data shows that 1,462 Sonata Hybrids were registered nationally in July. That was enough to make Hyundai, with an 8.2 percent share of the segment, the fourth biggest advanced-tech car seller in the U.S. The 38 mpg (combined) hybrid is benefiting, Drury said, from a marketwide surge in Hyundai's appeal as its vehicles' bargain prices, stellar fuel economy ratings, vastly improved styling and generally good reviews continue winning new customers. Registrations of the Sonata Hybrid, introduced in January, rose 12 percent in July.
Toyota: Still the 800-Pound Gorilla
The Prius, introduced as a dedicated hybrid in the U.S. in 2000, has become synonymous with "hybrid" in the minds of most consumers, as the monthly sales figures clearly illustrate. After several months of famine, Toyota dealers in July began receiving bigger shipments of the popular gas-electric car and sales rose 82 percent to 7,907. While barely more than half the 14,102 Priuses sold a year earlier, July's total was the highest in three months and gave the Prius a commanding 44 percent share of the advanced-drive market. That's down from 59.6 percent share a year earlier, but 18 new hybrids and EVs have joined the segment and been chipping away at the Prius' dominating lead since then.
Overall, Toyota – with three Toyota brand hybrids and five gas-electric models in the Lexus stable - sold 11,047 advanced-drive cars and SUVs in July, accounting for 61.6 percent of the market. Almost all, while selling in fairly small numbers, followed the Prius' lead with big declines from a year earlier but gains from weak June performances. The exception was Toyota's Camry Hybrid, which saw sales fall 12.5 percent from June and, with monthly volume of just 393, was down 69 percent from July 2010. The Lexus CT200h made up for the Camry's failings, however. Its 1,553 sales were a huge increase from June's inventory-constructed 240 sales and represented the model's second-best month since its March introduction.
The Highlander Hybrid SUV, with 185 sales, a 68 percent drop from a year earlier but more than double the 74 sold in June, rounded out the Toyota lineup. On the Lexus side of the corporate hybrid ledger, the iconic RX 450h crossover was down 50 percent from a year earlier but, at 671 sales was up 62 percent from June and the HS 250h sedan, with 360 sales, was up 85 percent from a year earlier and 92 percent from June – one of the few vehicles in the segment to do better in both comparisons. Lexus' high-priced, low-volume hybrids, the GS 450h sedan with 26 sales and the LS 600h L with just six sales, hardly register on the charts and posted mixed results – the GS model up 62 percent from July 2010 and 8 percent from June while the limo-like LS was down 57 percent from a year earlier but up 50 percent (that's two more sales) from June.
Honda: Clinging To No. 2 Spot
It's a big drop from the top slot to the runners-up. Second-place Honda, with three hybrid models, booked just 2,176 sales but that was good enough for a 12.1 percent share of the segment. The Insight hybrid had its worst month since its introduction in March 2009 but was the brand's top gas-electric model for July, its 987 sales representing a 47 percent fall from a year earlier and a 3.3 percent dip from June. The year-old CR-Z was second with 878 sales, down 9 percent from June (it wasn't available in July 2010), and the aging Civic Hybrid might as well have stayed home, its 311 July sales representing a 49.6 percent plummet from a year earlier and a 25.6 percent drop from June. The Civic is about to be replaced and Honda is letting supplies run down, so sales likely were artificially constrained, but the new 2012 Civic (not the hybrid model) just got a mediocre review from Consumer Reports and was dropped from the influential magazine's list of recommended buys, a decision neither Honda nor Edmunds.com's own testers agree with but which still could bode ill for sales down the road.
Ford: Third, Barely
Ford Motor Co., which now has three hybrids in its stable with the elimination of the Mercury marque and its two gas-electric models, was barely able to stay ahead of one-model Hyundai, selling just 1,588 advanced-drive cars and SUVs, good for an 8.8 percent market share. Its volume in the segment may soon improve with the addition late this year of the 2012 Focus EV and next year of a new conventional hybrid as well as the C-Max plug-in hybrid. But for now, Ford dealers are making do with one crossover -- the Escape Hybrid -- and a sedan -- the Fusion hybrid -- that last month was outsold by its pricier upscale sibling, the Lincoln MKZ Hybrid. The numbers remain unimpressive with dealers moving just 652 Escapes, down 42 percent from a year earlier and off 21 percent from June, 480 MKZ Hybrids, unchanged from June (and not sold a year ago) and 456 Fusion Hybrids, down 71 percent from July 2010 and off 53 percent from June.
Nissan: Power Of The Plug
Formerly a one-trick pony with a pretty limited trick - the Altima hybrid using a system licensed from Toyota and sold in just seven states - Nissan is showing some muscle thanks to its new Leaf EV, the first and so far only mass produced, full-service battery-electric car in the market. In the corporate sweepstakes, it trailed fourth-place Hyundai, whose own single-model hybrid lineup was discussed above, by 300 sales but should see continuing increases as more Leafs and the new Infiniti M35 Hybrid enter the U.S. sales channel in volume. For July, Nissan delivered 931 Leafs – fulfilling advance orders placed months ago and selling in only a handful of states so far – along with 204 Altima Hybrids and 35 M35 Hybrids in the first few weeks of its introduction. Leaf deliveries were down 45 percent from June (the EV wasn't sold a year ago), when the pipeline was stuffed with cars delayed by the company's earthquake-caused production slowdown. Altima sales were off 46 percent from a year earlier and down 18 percent from June.
Big Names, Tiny Presence
There are five additional companies selling hybrids in the U.S., but collectively they account for just under 3 percent of the market. Most are new players with just one model although one, General Motors Corp., is an established player that is winnowing down its offerings as it concentrates on its Volt plug-in hybrid. With six models still being marketed, GM accounted for just 277 advanced-drive sales in July, and the Volt's 125 deliveries – in just five states - represented nearly half the total. (GM is producing more Volts than that, but had previously said it would be sending most of its July production to dealerships for use as demonstrator models). Volt deliveries were down 77.7 percent from June, a substantial drop, and GM now says that the 2011 models are almost all sold with retail deliveries of 2012 models into most states not slated to begin until October.
The rest of the players in the field are prominent companies marketing high-end hybrids with so-far limited market acceptance. Porsche, which sold 130 Cayenne Hybrid SUVs, down 14 percent from June, heads the list, followed by Mercedes-Benz, which sold 44 S-Class Hybrids and 8 M-Class Hybrids for a total of 53, down 21 percent from June; Volkswagen, which sold 14 Touareg Hybrid SUVs, off 39 percent from June, and BMW, which sold seven Active Hybrid 7-Series sedans, up from five in June, and six Active Hybrid X-6 crossovers, unchanged from June. None of the four companies were selling these advanced-drive vehicles a year ago.
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