SUV Sales Booming!

[edit: see the update on this in my post OK, Maybe Not]
There is a common myth floating around lately that SUV sales have tanked. In fact, it just isn’t true and Americans it seems are still unwilling to give up their large cars or to buy the hybrid versions of those large cars.

Keith Naughton has written a followup article to last week’s print article about SUV and hybrid sales. Last week he had an article in which he wrote that sales of the Cadillac Escalade, a monster SUV, were soaring, while the Honda Accord and Ford Escape hybrid sales were tanking, all in the midst of our supposed gas crisis (Griping About Gas Prices … in a New SUV). This week, he has a followup article in Newsweek online giving some more detail on why that is so, namely that the payoff for the hybrid premium is still quite long (The Hybrid Savings Hype). He has some great figures on how much harder dealers find it to sell equivalent hybrids (Accords hybrid versus regular Accord; Ford Excape hybrid versus regular Esacpe).

In essence, it comes down to this: the mileage estimates for the hybrids are much exaggerated and the payoff is lengthy.

That all makes perfect sense. Most people who care about gas mileage, especially if they are motivated by economics more than ideology, will simply buy a smaller car. That’s a double win, since the smaller traditional car gets better mileage than the hybrid SUV anyway, plus it’s cheaper out the door. People motivated by green ideology, on the other hand, aren’t choosing between a hybrid and a regular Ford Escape or Honda Accord, their choosing between a Corolla and a Civic if they are “green lite”, between a Civic and bike if they are hardcore green.

The other thing to consider is that cars last a long time these days. Most people who think about sustainability and the environment know that something as large and complex as a car has a huge “embodied energy”, that is the energy required to make it. If I take me high mileage 1995 Ford Escort, now getting about 34 mpg, and go out and buy a brand new car that gets double the mileage, there will be some gas savings over the next five years. If, on the other hand, I maintian the car I have and keep it in good shape so it runs fifteen years instead of ten, I have effectively reduced the huge embodied enrgy load that goes to my car ownership by 50%.

So basically, part of the tough sell for hybrids is that consumers driven by environmental ideology are already driving efficient cars and are planning to drive them less and drive them into the ground. When they or other people who are trying to go green for financial reasons DO go out and buy a new car, the easiest way to boost gas mileage and control cost is to buy a smaller car rather than paying the hybrid premium on a larger car.

So that leaves people who don’t car much about the environment and, bitch and complain all they want, are not in reality all that cost-conscious. Those people are the ones driving the booming sales in SUVs. The real question, and Naughton only raises this briefly, is at what point do large numbers of those people really start to feel pain? It’s only then that we’ll see SUV sales tank and find fleet efficiency finally start to rise again.

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