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Gas Prices and Hybrid Sales
2 June 2005
Fun with numbers. In response to a question posted to the May Hybrid Sales story below, I plotted the average monthly price of gasoline against the monthly sales of hybrids from January 2004 to may 2005.
This is only a very quick and dirty analysis—there are many imprecisions in doing this (such as averaging up the price of all gasoline formulations in all areas, and pairing that with national hybrid sales numbers. It would be better to use regional data, but I don’t have the matching datasets currently).
But the intuitive link between hybrid sales and gas prices, at the very rough level represented here, is somewhat supported by the data. The monthly price of gasoline (all formulations, all areas) and the number of hybrids sold have a correlation coefficient of 0.82—that’s a strong correlation, but not overwhelming. The r2 on those data is only 0.67—in other words, a change in gas price accounts for some, but much less than all, of the change in hybrid sales.
Which, of course, makes sense. There are other factors at play beyond the sheer economics of the price of gas, especially since at current price levels (for both gasoline and hybrids) and typical miles driven, the savings generated by the reduced fuel consumption don’t match the increased cost of the hybrid vehicle.
June 2, 2005 in Hybrids, Market Background, Sales | Permalink | Comments (10) | TrackBack (0)
Comments
Posted by: stomv | June 02, 2005 at 09:49 AM
I would also add the sliding effect of car demand--people won't look at gas prices and switch from buying an Excursion to a Prius. Nearly everyone downsizes a notch or two on the fuel efficiency scale, so much of the response to higher gas prices is masked. Hybrid sales only measure those who have both the money and the willingness to take a big step. In that light, I think it's remarkable how well hybrids are selling in the U.S. already, before we're even close to truly "high" gas prices.
Posted by: loudGizmo | June 02, 2005 at 09:49 AM
Sirs: I will submit that the price of fuel is not going to go down as production decreases and consumption increases. Of even greater concern is fuel rationing as public policy. Then the high MPG vehicles have a clear advantage, and the high initial price of the vhehicle is offset by at least having a way to get to work!
Posted by: Lamar Johnson | June 02, 2005 at 10:40 AM
How is it that all car purchases are for economic reasons?
"Detroit"spend how much on marketing and sales based upon color accessories horsepower etc. Is a sunroof or cd player or leather interior a variable of gas prices?
People by cars to feel good, look good. I waana be Hollywood , so buy a Prius. I wanna feel environmental about emmisions too.
Look at all the money spent on GE "wind" ads and Shell solar - HA HA HA. If only they spent that money on actually marketing and sales of those products.
Posted by: dufus | June 02, 2005 at 01:01 PM
Also: take a look at this Autoguy post about the economics of hybrids vs. direct-injection engines. If regular engines combined with lower-sulfur gasolines can approach the fuel economy of hybrids, hybrids could fall out of favor -- unless they can recharge the batteries overnight.
Posted by: Rob McMillin | June 02, 2005 at 01:10 PM
The main problem with this analysis is that the supply of several hybrids (including the Prius which accounts for OVER HALF of the sales) is far below the demand - hence the long waiting lists. Therefore, the sales do NOT represent the demand, and the plot of gas prices vs. sales is pretty meaningless.
Posted by: Karkus | June 02, 2005 at 04:02 PM
I have spent a good many hours studying where we are going (Going to have to) to go with automotive transportation. Much of this impacts on all forms of transportation and even electric generation.
There is an overwhelming number of proposals:
All fossil fuels - Oil Gas Coal Others
Electricity - Generated from many different sources
Hydrogen
Fuel Cells
Bio/Alcohol/Diesel
Borax
Some others that don't come to mind right now.
We have a lot of Coal. There is a number of ways it can be converted for transportation uses. It will last for many years, after all of the other fossil fuels are long gone.
The federal government is quietly sleeping away on this. They are paying millions of dollars for billions of words about this. These words will never be read by anyone who can understand and do anything they say.
Certainly we should be constructing infrastructure RIGHT NOW on this temporary fix.
In my considered opinion we will never be able to use fuel cells or Hydrogen for transportation. The reasons are so many that it would take ten pages just to outline them.
Electricity and efficent ways of making and storing it will most likely be part of the solution. You can make portable energy with alcohol. Brazil did it and with good reason is now backing away from it. You might be amazed at how much alcohol you can get from fast growing Popular trees. Industrial Hemp is another good source of feedstock. (The stuff grows like a weed!)
I am convinced that the ultimate solution - right now - is BioDiesel. In order to improve it, you need to use alcohol and the catalyst used in transesterification of vegetable or animal fats and oils is lye -- either sodium hydroxide (NaOH, caustic soda), or potassium hydroxide (KOH) to precipate the Glycerin. Even now it really helps the efficiency to add a small amount of BioDiesel to petro diesel. Injectors just don't clog when it's added. Of course, the government is sound asleep at the wheel here also. We could make enough biodiesel at the Salton Sea to provide all the biodeisel the USA will ever need. Think about that! No more imported oil.
I'll stop for now. I welcome all questions. Somehow I think we can all work together and find a way.
Posted by: Lucas | June 02, 2005 at 04:37 PM
I would like to see the regional data for Florida. In my area, the price of low grade gas has been around $2.20 per gallon for most of the year. As the population increases, I am sure the gas will not get any cheaper. The population is also affecting fuel consumption during hurricane seasons. Last year, many gas stations ran conmpletely out of gas because of hurricane preparations and evacutations. If there is a state that desperately needs vehicles with better fuel milage it is Florida.
Posted by: bac | June 02, 2005 at 06:21 PM
Please someone can help me to find out how much does gas cost per gallon in Florida?
I really appreciate the answer to this question.
THANK YOU!!!!
Posted by: Dean Carlson | June 21, 2005 at 04:32 PM
My name is Joel Oliva and i live in Lehigh Acres FL and i have the solution for gasoline. if someone would transfer me to the main government line then i will begin the process. basically an electric car that never has to be plugged in and goes 300 MPH and 300 HP and is also used for a house generator, it does work and many people i have spoken to want it. please transfer me because i have searched everywhere and no luck. this is the future for airplanes as i can make 85% of everything in the world such as hover cars and airplanes traveling at over 25,000 MPH. im not crazy this is reality. i hope to hear from you again. this is the real future towards automotive and housing and more. thanks
Posted by: Joel Oliva | February 01, 2006 at 04:36 PM
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Thanks for responding to my questions! "Unfortunately", the price of gas hasn't been above $2.10 for enough months to get good data on the right side of the plot.
It does reinforce the obvious though -- increased gas prices do stimulate more hybrid sales, perhaps due to both legitimate financial decisionmaking (total cost of operation per year, present value) and psychological influences (I spent $x to fill up my gasguzzeler last time, and that's just too much*.)
* But $1 less wouldn't have triggered the same response...