Hybrid Car Review

2008 may well be remembered as some of the best months (so far) and the worst months for hybrid car sales we've seen so far.  With sales going from almost 40,000 units in April to under 17,000 in December, it's no wonder some people are wondering if the shine has rubbed off of the hybrid hype.  When sales of hybrids drop down under what they were three years ago (see the graph), you know things are bad.

But to say "Gone, hopefully, are the days when the hybrid hype machine said the dual-powertrain vehicles would dominate the market and be standard offerings for most vehicles in every fleet", is pretty short sighted, given where car sales are right now.  For instance, light duty sales were down 18% for the year, while hybrid car sales were only down 11%.  But, there's no joy in hybrid land, either.  Both lowering fuel costs and the general economic downturn has pushed hybrid car sales way down at the end of the year.

And it doesn't look like that's going to change any time soon.

New Hybrid Models for 2009

But, there are some bright spots in the upcoming months.  Toyota will begin selling its next generation of Prius as well as its new dedicated Lexus hybrid, the HS 250h.  Honda is coming out with its new Insight, again a dedicated hybrid car.  And Ford is releasing their Fusion and Milan Hybrids.  The introduction of so many models is sure to buoy hybrid car sales.  To counteract that, Chrysler is killing production of their Durango and Aspen SUV hybrids, but honestly, there's very little lost there.  

Keep in mind, however, the introduction of new models isn't a panacea.  Ford will limit sales of their new Fusion and Milan just like they have the Escape and Mariner.  And there's no guarantee people will take to the new Honda Insight the way they did the Prius.

If it wasn't for the economic downturn, I would say hybrid car sales would likely be way up this coming year.  As it is, however, until people start buying cars again, your guess is as good as mine when it comes to what 2009 is going to look like. 

2009 is Looking Like a Good Time to Buy a Hybrid
Unlike back in June when I told you it wasn't time to buy a hybrid, now may be a great time to buy.  With bailouts, factory shutdowns, inventory issues, and so on, if you're in the market for a hybrid, 2009 may be a great time to buy. If things continue the way they are, hybrids are no longer going to be kept off of the incentive list.

Keep in mind if you are in the market, buying a Toyota or Honda hybrids will no longer make you eligible for a federal tax credit.  There may be other state and local incentives for buying one, but the federal tax credit for Honda phased out on January 1st, 2009. 

Plug-in Hybrids Will Dominate the News, but not Sales in 2009
Although plug-in hybrid sales, including E-REVs, will begin in 2009, they are not likely to really make a splash until the Chevy Volt appears.  When competition between the E-REV Volt and the plug-in Prius starts to heat up in 2010 and beyond, then you may see something.   Other car makers may be coming to market sooner, but until GM and Toyota hit their stride, the plug-in market will be a side-show at best.

Predictions for 2009 in the Hybrid Car Market
Put simply, my best guess is I don't know what's going to happen in the market.  If gas prices stay low, a downward pressure on sales will continue, but even that's a secondary factor to the economy.  Unlike GM, Toyota doesn't look like they're going to go under any time soon (perception is huge), so the major player isn't at as big as a risk from the perception of bankruptcy.

But I am willing to say sales for 2009 will be down.  High price items like cars aren't going to start recovering any time soon (I'm not an economic analyst, but that's my impression) and so the economy is going to keep hybrid sales down.  But the introduction of several models should counteract it, keeping the general car sales downturn from making things worse than they are.  So, hybrid car penetration will most likely increase, even if volume is down.