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The HybridCars.com monthly sales Dashboard is a collaboration of HybridCars.com and Baum & Associates, a Michigan-based market research firm focusing on automotive issues including the hybrid and electric vehicle market.

The year certainly ended with a bang in terms of both overall sales and sales of the vehicles covered by the Dashboard.

While most forecasters did not expect total sales in 2016 to exceed 2015’s strong results, an exceptional December – fueled by various incentives – led to a record sales level of 17.5 million, exceeding 17.4 million in 2015.

With regard to the alternative passenger vehicle market, sales in December were up in every category compared to last December, and annual sales were up in plug-ins and battery electrics, but down in diesels and hybrids.

All-Electric Vehicles

Battery electric vehicle sales had an excellent month based on strong sales of the category leaders, the Tesla Model S and X and the Nissan Leaf. Although December was strong for Tesla, fourth-quarter sales did not reach the company’s expectations, as Tesla had issues with production in October and November related to its new Autopilot hardware. However, these snags were resolved by early December. Tesla’s total U.S. sales for 2016 (we expect precise figures in February) are estimated at over 47,000 as compared to just over 25,000 in 2015. While the Model X was the primary reason for the increase, there was also more than 15-percent growth in the Model S. This was due to a variety of new models including the launch of some lower cost variants. While the Leaf enjoyed strong growth in December, the model had an almost 20-perceent annual drop since its capabilities fell behind many of its competitors. The Leaf won’t have as much range for the dollar as the best EV prospects now and pending until a major update for the car to be launched in early 2018. Speaking of Leaf competitors, the Chevy Bolt launched in December with sales of 579 units with the product currently available in California and Oregon. Chevrolet says a national roll out is to now ensue, and full nationwide availability may not occur until mid-year. Battery electric sales as a share of total sales in December were at an all-time high and the same is true for 2016 as a whole.

Plug-in Hybrids

As for plug-in hybrids, these were also up sharply from last month, and ended up well ahead of 2015 for the whole year. Sales of the Volt had their best month ever based upon strong incentives to dealers and deals for customers enabling also a best-ever annual result for 2016. This was related to new capability in the updated Volt, but more than usual marketing was required to achieve this result. The Prius Prime has relaunched in the last couple of months and is now the second best seller in the category. The two Ford plug-in entries – C-Max Energi and Fusion Energi – both increased in 2016 as compared to 2015, based in large part on improvements in capability in mid-year. A full year of sales of these vehicles should allow further growth in 2017. The share of total sales for plug-ins this month is much higher than year-to-date totals and is in fact the highest monthly rate to date. In addition, the share for the year for plug-ins is also the highest ever.

Hybrid Commentary

While the results were positive for plug-in electrified vehicles, hybrid sales had a good month, albeit a bad year. The Toyota RAV4, Ford Fusion, Honda Accord, and Toyota Highlander all had good months and good years (although the Accord was only available part of the year). It is noteworthy that each of these products were launched or updated this year which accounts for their strong results. Regardless of the market segment, new product does matter.

While the RAV4 Hybrid trailed the Prius in absolute volume, it was by far the most important entrant among hybrid vehicles since it is in a very popular market segment (small crossovers). In fact, the Prius Liftback was also new in 2016 but it failed to generate the consumer interest Toyota had hoped for. (It is doing extremely well in Japan and in fact that led to less availability in the U.S. since sales here were disappointing.) While sales for hybrids were down in 2016, this category remains the largest among the alternative vehicle categories. This is due to the fact that the price penalty for hybrids is less than other categories, and there is greater model variety. In addition and perhaps most important, the adjustment for consumers to hybrids is modest as compared to plug in vehicles – that is, they can be run like conventional cars without needing to learn new behaviors.

Diesels

Diesel sales in December were strong, focused on robust sales of the Ram Pickup and Ford Transit which lead the category. For the year, Ram Pickup sales were down and diesel sales were modestly down as a result. The growth of the Transit led to greater diesel sales, but the model is now fully available so a large increase in sales going forward is unlikely. On the Volkswagen front, an agreement has now been reached for the 3.0-liter vehicles with a combination of buybacks and vehicle fixes. However, VW appears not to be interested in selling diesels in the American market so we do not expect significant diesel sales going forward. Given the growth in Ford and FCA diesel sales, diesel sales excluding VW were up 8 percent for the year.