Going Green Is Great, But Do Poor Hybrid Sales Signal That The Gimmick Is Over?

Sales of hybrid cars fell by 17.5 percent in June, compared to one year ago, while the overall car market grew by more than 14 percent. With gas prices remaining low, consumers looking for a new car were not motivated to spend more money on a fuel-efficient car. At the same time, carmakers were apparently eager to put incentives on conventional models, but not to extend those offers to gas-electric cars.

The comparison of June 2010 versus June 2009 underscores the importance of gas prices for greener fuel-efficient cars. A year ago, hybrids saw a bump in hybrid sales along with the usual rise in gas prices at the beginning of the summer. This year, gas prices actually fell. So, despite outrage over the Gulf Oil Spill—which is producing a stronger-than-ever desire for alternatives—consumers apparently are not willing to spend for green.

It all adds up to a fairly dismal scenario for 2010 hybrid sales. Halfway through the year, and we’re on track for the third straight year of declining hybrid sales—although the drop will probably be not as bad as the two previous years. Year-to-date sales stand at 130,000—up by 3 percent. But that’s not likely to last, because hybrid sales jumped with cash-for-clunkers in summer 2009.