Rising Gas Prices Not Resulting in More Hybrid Car Sales

5 years 10 months 3 weeks ago Sunday, June 02 2013 Jun 2, 2013 Sunday, June 02, 2013 3:15:00 PM CDT June 02, 2013 in News
By: Brendan Cullerton
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COLUMBIA - With gas prices running near all-time highs, there is disagreement between car dealerships about how those high prices affect what cars mid-Missourians are buying.

The average price for a gallon of gasoline sold in the Midwest rose from $1.437 in June of 2003 to $3.498 in April of 2013, according to the U.S. Energy Information Association. Although there were many dives and spikes in the rates, the change is mostly a result of a steady year-by-year increase.

Steve Rennells, general sales manager at Head Motor Company, a Columbia Kia dealer, said the increase in gas prices has prompted car buyers to be more aware of fuel efficiency.

"I think most customers now are more conscious about buying a vehicle that doesn't get as good of fuel mileage," Rennells said.

Rennells also said that in some cases, people actually save money by purchasing a new vehicle because of how much money they end up saving by needing less gas.

However, Scott Calhoun at Joe Machens Mercedes Benz said the shift of having more fuel efficient cars is not market-driven.

"It seems that it would have to approach $5.00 or more per gallon in order for people to actually alter their buying decisions," Calhoun said. "People are going to buy whatever it is they have a need for."

Calhoun said there are more fuel efficient cars now than ever before, but that is because the U.S. government requires specific fuel efficiency rates for car dealers, not because of consumer demand. 

Rennels and Calhoun both said the sales for Hybrid and Electric Vehicles (HEV) are still well below those for conventional, gas-powered cars.

According to the U.S. Department of Energy, HEV sales are trending upward. HEV car sales first reached over 200,000 in 2005 and reached 352,274 in 2007. Despite the government tax credit for purchasing an electric vehicle, sales then dropped in every year until 2011 before jumping back up to 382,704 in 2012.

Electric and hybrid vehicles currently comprise 3.8 percent of all cars purchased in the United States, according to the Electric Drive Transportation Association. That means less than one in 25 people who buy a car choose an HEV.

"Sometimes you have to justify how many miles you're going to drive that car to see whether the value is going to pay for the hybrid or not, and in a lot of cases it doesn't," Rennels said.

Consumers agreed that price is a barrier when it comes to purchasing electric vehicles.

"The electric cars are pretty expensive," driver Zach Porter said. "But they are pretty fuel efficient. I'll give them that, but that's a large sum of cash."

Calhoun said it is difficult to tell where the market for hybrid and electric cars will go in the coming years because of the uncertainty of gas prices and new car technology.

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