Buyers Back Away From Hybrids and EVs as Gas Prices Fall | Edmunds

Buyers Back Away From Hybrids and EVs as Gas Prices Fall

SANTA MONICA, California — Car buyers are trading in hybrid and electric cars for SUVs at a higher rate than ever before as gas prices fall, according to a new analysis from

About 22 percent of people who have traded in their hybrids and EVs in 2015 bought a new SUV.

The number represents a sharp increase from 18.8 percent last year and it is nearly double the rate of 11.9 percent just three years ago.

Overall, 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.

"For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment," said Jessica Caldwell, director of industry analysis. "Three years ago, when gas was at near-record highs, it was a lot easier to rationalize the price premiums on alternative-fuel vehicles. But with today's gas prices as low as they are, the math just doesn't make a very compelling case."

Of course, consumers have a wide array of hybrids and EVs to choose from, including the Toyota Camry Hybrid, Honda Accord Hybrid, Cadillac ELR, Nissan Leaf and Tesla Model S. And there are even more in the pipeline, including the upcoming Cadillac CT6 Plug-in Hybrid, Chevrolet Bolt and the 2016 Toyota Mirai fuel-cell sedan.

The long list of SUV choices includes the 2015 Chevrolet Trax, Ford Edge, 2016 Fiat 500X, 2015 Honda CR-V and 2016 Kia Sorento.

The average price for a gallon of unleaded gasoline in the U.S. stood at $2.47 on Wednesday versus $3.66 a year ago, according to the AAA Daily Fuel Gauge Report.

Gas prices are expected to average $2.45 a gallon this summer compared with $3.59 a gallon last summer, according to the U.S. Energy Information Administration.

"The average U.S. household is expected to spend about $700 less on gasoline in 2015 compared with 2014, as annual motor fuel expenditures are on track to fall to their lowest level in 11 years," it said in the latest short-term outlook report.

Edmunds calculates that at the peak average national gas price of $4.67 a gallon in October 2012, it would take five years to break even on the $3,770 price difference between a Toyota Camry LE Hybrid and a Toyota Camry LE. At today's national average gas price of $2.27 a gallon, it would take 10.5 years to close the same gap.

Shoppers can calculate "breakeven" times using Edmunds' Gas Guzzler calculator.

Edmunds says: Automakers are responding to this trend by cutting prices on several hybrids and EVs. Recent examples include a $10,000 price cut on the 2016 Cadillac ELR and a $1,650 price decrease on the 2015 Chevrolet Spark EV.

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