in partnership with Polk

Hybrids Worldwide

"Expected 2006 global hybrid sales" based on vehicle registration trends through July 2006.

"Top 5 global hybrid markets" and "Top 5 US hybrid markets" based on vehicle registrations CYTD July 2006.

October was a tough month for hybrid vehicles in the United States. Sales were down almost 20% from last month, and hybrids accounted for only 1.5% of sold vehicles— compared to a high of 1.8% last August. But before we start writing an obituary for hybrids, we should consider that October was a down month throughout the auto industry: sales of all types of vehicles fell by 10% in October. In the broader context, things look more promising for hybrids. Sales are up 10% compared to October 2005, and the growth in hybrid sales remains well above the growth rate of the overall vehicle market.

Two factors may have affected some hybrid shoppers this October. First, gas prices continued their four-month-long decline, falling to an average of $2.29 per gallon in October. Second, tax credits for buyers of Toyota hybrids were halved this month, a change that remains in effect until April 2007, when credits for Toyota vehicles will be reduced further.

Undoubtedly, one or both of these changes in the economics of the hybrid purchase turned off some potential buyers. But neither offers a complete explanation for October’s sales numbers. Gas prices matter, but our analysis shows only a moderate correlation between monthly hybrid sales and gas prices. (The correlation weakens considerably for big-sellers like the Toyota Prius.) Nor are tax credits the raison d’etre for many hybrid purchases. Some Toyota hybrids experienced 30% sales drops this month, but the Prius (which offers the largest tax incentive relative to purchase price) saw a much lower decline.

What matters to many hybrid buyers—particularly those who are sustaining sales of the Prius—has little to do with cost savings. Research shows that hybrids stand for bigger ideas, including preserving the environment, gaining independence from oil companies and foreign oil-producing regimes, and being savvy about the latest technology. The more efficient a hybrid is relative to conventional vehicles, the more strongly it connects with these ideas. Thus, high-efficiency, high-mileage vehicles like the Toyota Prius, Toyota Camry, and Honda Civic are selling at the highest volumes—regardless of gas prices. In contrast, lower-mileage, performance-oriented hybrids like the Honda Accord and Lexus RX 400h are selling at lower volumes, and have seen substantial sales declines from 2005 levels.

US Sales

Our information is based on hybrid sales as reported by the manufacturers. For each model, this month’s sales are shown compared to sales in the previous month and at the same time last year. We also examine hybrid market share by model and manufacturer. The historical sales graph for top-selling hybrid models shows estimated 2006 volumes based on sales-to-date.

This month, the Honda Civic Hybrid shows an extremely high annual growth rate (890%). This is due to the unusually low number of Civic Hybrids that were sold last October during Honda’s model changeover. Based on sales so far this year, we estimate that Civic Hybrid sales will show a modest annual growth rate of about 20% this year.

Hybrids sold in the U.S. (January – October 2006): 211,728

U.S. hybrid sales for October 2006

Model Units vs. 9/06 vs. 10/05
Insight 9
Prius 8,733
Civic Hybrid 2,288
Accord Hybrid 287
Camry Hybrid 2,806
Highlander Hybrid 1,643
RX400h 1,239
GS450h 177
Escape 1,343
Mariner 259
All hybrids 18,784

U.S. hybrid sales for October 2006 by manufacturer and model

United States Sales by Make

U.S. hybrid market yearly sales (1999 – 2006)

United States Yearly Sales

Regional Data

Source: R. L. Polk & Co.

Curious where hybrid buyers live? We present the data in two ways. First, we list the 15 cities and states that boast the largest numbers of hybrids on their roads. For example, residents in the New York City area put over 9,000 new hybrids on the road this year. Second, we adjust for population and look at hybrids per person (in states) or per household (in metro areas). This lets us include cities like Portland, OR: a city that has fewer overall vehicles (and thus fewer hybrids) but has more hybrids per capita than anywhere else.

States with the Highest Hybrid Sales

Rank State Registered Hybrids*
1 California 44,714
2 Florida 8,703
3 Texas 8,540
4 New York 8,060
5 Virginia 7,638
6 Illinois 6,098
7 Pennsylvania 5,739
8 Washington 5,336
9 Massachusetts 5,055
10 New Jersey 4,899
11 Maryland 4,632
12 North Carolina 4,555
13 Ohio 4,018
14 Oregon 3,819
15 Colorado 3,646

*2006 Registrations (August 2006 YTD)

States where hybrids are most popular

Rank State Hybrids per 1000 residents*
1 California 1.24
2 Oregon 1.05
3 Virginia 1.01
4 District of Columbia 1.01
5 Vermont 0.96
6 New Hampshire 0.92
7 Hawaii 0.88
8 Washington 0.85
9 Maryland 0.83
10 Massachusetts 0.79
11 Colorado 0.78
12 Connecticut 0.67
13 Delaware 0.65
14 Arizona 0.61
15 New Mexico 0.60

*2006 Registrations (August 2006 YTD)

Metropolitan areas with the highest hybrid sales

Rank Metropolitan Area Hybrids*
1 Los Angeles 20,772
2 San Francisco 13,461
3 New York 9,744
4 Washington 8,092
5 Boston 5,345
6 Chicago 4,870
7 Philadelphia 4,640
8 Seattle 4,441
9 San Diego 3,391
10 Denver 3,168
11 Sacramento, CA 3,119
12 Portland, OR 2,885
13 Phoenix 2,754
14 Houston 2,496
15 Dallas/Ft. Worth 2,429

*2006 Registrations (August 2006 YTD)

Metropolitan areas where hybrids are most popular

Rank Metropolitan Area Hybrids per 1000 Households*
1 Portland, OR 7.09
2 San Francisco, CA 5.71
3 Monterey, CA 4.62
4 Santa Barbara, CA 3.98
5 Los Angeles 3.75
6 Bend, OR 3.61
7 Washington, DC 3.59
8 San Diego 3.30
9 Charlottesville, VA 3.30
10 Eugene 2.87
11 Honolulu 2.70
12 Seattle 2.61
13 Eureka 2.37
14 Bozeman, MT 2.36
15 Sacramento 2.32

*2006 Registrations (August 2006 YTD)

Looking Ahead

In October, the Camry Hybrid became Toyota’s first North-American-built hybrid vehicle. That’s one reason that the Camry hybrid is the vehicle to watch moving forward. By wrapping high fuel economy in a larger, more luxurious package than previous hybrid sedans, the Camry Hybrid has drawn new buyers to the hybrid market. After its introduction last April, Camry Hybrid sales quickly rose from zero to 5,000 units in just four months. However, October’s Camry Hybrid sales numbers fell below Toyota’s target of 4,000 units/month. Could the Camry Hybrid follow the same path as Toyota’s hybrid SUV, which were well-received soon after launch, but have since experienced lower sales? One month hardly makes a trend. We’ll need to wait and see how the Camry Hybrid performs in November (and beyond).

Another vehicle to watch in November is Saturn’s VUE Green Line. In many ways, the VUE GL embodies a "low-technology, low-cost" strategy that is the opposite of bestselling hybrids like the Prius. But since other manufacturer’s hybrid SUVs have not exactly been flying off of dealership lots, we’re interested to see whether a vehicle with a different approach might have more success. Although the VUE Green Line went on sale in October, General Motors decided not to release separate sales figures for this hybrid model. Why is G.M. mum about sales figures? Are they hiding good news or bad? Hopefully, the story will come out in November.

Finally, next month may mark the end of Honda Insight sales. The Insight launched the U.S. hybrid market in 1999, and now it has become the first to depart the hybrid stage. Production of the Insight has already ended, but sales of remaining units continue to trickle in. In October, dealers moved nine units. If any stock still remains, one lucky November buyer may have the honor of driving the last new Honda Insight off a dealership lot.