Annual Hybrid Sales Drop for First Time

Annual sales of hybrid vehicles fell by 10 percent in 2008 compared to last year. This marks the first year that hybrid sales dropped since gas-electric cars were introduced in the United States in 2000.

In the first half of 2008, hybrid sales were on pace to exceed 2007 numbers—but the impact of the economic recession, tight credit markets, and a sharp decline in gas prices took a toll. In 2008, hybrid sales totaled approximately 315,000 units compared to 350,000 units in 2007. Nonetheless, 2008 hybrid sales outperformed the total light duty vehicle market, which fell by 18 percent.

Historically, hybrid sales have grown due to new product introductions. In 2008, the only new hybrid introductions were low-volume vehicles from General Motors and Chrysler. Throughout 2008, GM averaged approximately 1,000 hybrid sales per month—but managed to increase sales toward the end of the year. In December, GM expanded its hybrid sales to 2,555 units—with 1,729 of those sales coming from hybrid versions of the Chevrolet Tahoe, GMC Yukon, and Cadillac Escalade, all full-size SUVs. Chrysler rolled out its full-size SUV hybrids late in the year, and tallied approximately 100 sales for 2008.

The best-selling hybrid, the Toyota Prius, posted 158,884 sales in 2008, a drop of 12.3 percent from 2007. In mid-year when gas prices spiked above $4 a gallon, customers joined long waiting lists for the Prius. Those waiting lists, and general demand for hybrids, evaporated as gas prices plunged, falling below $2 a gallon by the end of the year.

Rebound in 2009?

While the fate of future hybrid sales are tied to the uncertain prospects for the entire auto industry, there are signs that hybrids will resume their growth trajectory in 2009. In April, Honda will introduce the 2010 Insight in an effort to offer high fuel economy at a price well timed for tough economic times. The new Honda Insight—selling at approximately $19,000—is expected to achieve fuel efficiency in the mid-40 mpg range.

If Honda achieves its annual goal of selling 100,000 units of the Honda Insight in North America, that car could single-handedly boost hybrid sales beyond 2007 levels. In addition, Toyota will roll out a new and improved Toyota Prius, and Ford will begin selling the Ford Fusion Hybrid—the first full-size sedan offering fuel economy above 40 mpg in the city. Ford is aiming to sell 25,000 units of the Ford Fusion Hybrid and the nearly identical Mercury Milan Hybrid—which would double its hybrid sales in 2009.

In the coming months, the most dramatic influences on future hybrid sales will continue to be gas prices, consumer confidence, and the availability of credit. Beyond that, President-elect Barack Obama is expected to significantly expand industry and consumer incentives for hybrids and other fuel-efficient cars, as part a program to jumpstart development in the clean energy sector.

Jim Lentz, president of Toyota Motor Sales USA, is optimistic that hybrid sales will rebound. “We’re going to see fuel prices creep up a bit,” he said in an interview with Associated Press. “I think the overall greening of America is going to see an increase in hybrid (sales) as well.”

The December Hybrid Market Dashboard will be post later this week.

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  • Jeff

    It is exciting to see the hybrid SUV sales increase for GM in December, although you have to wonder at what level of discount. It really seems that hybrid sales will be tightly aligned with fuel prices in the coming months, even more so than economic conditions in general. Adding the new Insight and Fusion will likely help, but if gas remains below $2/gallon I don’t see 2009 beating 2007.

  • Bryce

    I predict…..and I am not one for predictions….that 2009 sales will beat 2007 sales….but just barely. I am not sure if all these introductions will increase sales of hybrids, but perhaps limit the share of competitors more. The full size SUVs are doing well from GM and the Ford midsize offering I expect will have long waiting lists. I don’t expect the Insight to get 100,000 as expected, but still sell a respectful amount. Finally, I would expect the Prius share of the hybrid market to fall below 40% from its current 50-55% range.

  • Detfan

    The articles omits the new GM hybrid offerings coming the first quarter of 2009, the Chevy Silverado two-stage hybrid, the GMC Sierra two-stage hybrid, and the Saturn Vue two-stage hybrid(giving Vue buyers two hybrid options). If the trucks sell 10% hybrids, then GM could be selling in excess of 4,000 hybrid trucks a month.

  • Bryce


    It does seem that the SUV buyers took a liking to the hybrid drivetrains and bought them in larger numbers then even I expected. The truck drivers I would expect would be even more interested given that alot of these are for work and would be greatly appreciated for their fuel economy… getting diesel.

  • Boom Boom

    GM’s hybrids are hopeless. They don’t get the predicted fuel economy and no independent testing has given them good ratings. Not many people are buying the big SUV hybrids and fewer will by the trucks. (Look at the numbers on the last hybrid dashboard.) Truck drivers will be the last hold-outs against hybrids. GM put out lame hybrids and is suffering poor sales as a result. Consumers aren’t fools. Everybody talks about the “next quarter” for GM as if, they’re just on the cusp of getting a successful hybrid out, but they never do. (Chrysler is even more hopeless.)

    Ford, on the other hand, just beat both Nissan and Toyota in a head to head test with their Fusion in Car and Driver (the Malibu finished a distant last place) and seems able to compete with the Japanese alternatives. The Ford Escape Hybrid currently sells more than all the GM hybrids combined (and more than Honda and all of Toyota’s hybrid SUVs, too), so Ford seems the best hope against Toyota. I don’t know how long it’ll be before they dare take on the Prius, but they can still beat Toyota to the punch with a Hybrid mini-van or mid-size wagon, so there is room for competition.

  • Poopy

    i am waiting for the poop powered hybrid

  • H. Goswick

    All this talk of Ford selling 25,000 of its new 2010 Fussion/Milan hyrbrids this year is no more than hype. It is March and so far as I can find out Ford has zero of these new hybrids for sales. I have emailed Ford asking for availability in Macon, Georgia, but have not even gotten a reply. There is nothing on their website other than a promo. I think they called these cars 2010 models because that is when they hope to be able to have one for sale. Unfortunately, if they fold in 2009 no one will ever have the opportunity to buy one.