SUVs Drive Growth of Green Vehicle Sales | Edmunds

SUVs Drive Growth of Green Vehicle Sales


The latest analysis from Edmunds shows that after three years of decline, sales of green vehicles rose in the first half of 2017, spurred in part by an influx of new eco-friendly SUVs.

Edmunds data reveals that sales of hybrid, plug-in hybrid and electric models in the first six months of 2017 increased 21.5 percent compared to the same period in 2016. Partially responsible for the upturn is the availability of such vehicles as the Kia Niro, Lexus RX 450h, Nissan Rogue Hybrid and Toyota RAV4 Hybrid. SUVs and light trucks now make up 22.9 percent of the green vehicle market, up from 5.2 percent in 2012, Edmunds analysts noted.

"If automakers want car shoppers to adopt green technology, they can't just offer it exclusively in a little econobox," said Jessica Caldwell, Edmunds executive director of industry analysis. "While the styling of the iconic Prius used to be trendy, consumers today don't necessarily want a vehicle whose design screams 'green car.' And as tastes have taken a dramatic turn away from passenger cars, and battery technology improves, automakers have an opportunity to drive adoption by offering electric powertrains in vehicles shoppers actually want."

Another factor in the growth of green vehicle sales has been the increase in popularity of plug-in hybrid and fully electric models such as the Chevrolet Bolt EV, Hyundai Sonata Plug-In Hybrid and Nissan Leaf EV. The Edmunds analysis found that sales of these types of vehicles are up 45 percent year over year, meaning that one out of every 100 vehicles sold in 2017 had a plug.

But one question remains: Will consumers continue to buy green vehicles after federal tax credits begin expiring?

These subsidies of up to $7,500 per car have made a significant impact on EV and plug-in hybrid sales. But there's a 200,000-vehicle cap on federal tax credits, and a number of manufacturers, including GM and Tesla, are nearing that limit. As of now there's no guarantee the subsidies will be extended or new incentives will be implemented.

"Americans tend to buy cars based on emotion," said Caldwell. "If automakers can home in on the right products that excite buyers without the carrot of government subsidies, EVs have a much better shot at going mainstream at a quicker pace."

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