Only 27.5% of all hybrid and electric vehicle trade-ins in the US in 2016 have been applied to the purchase of another hybrid or EV, according to a new analysis from car shopping destination Edmunds.com. The rate is a sharp drop from the 38.5% of hybrid and EV trade-ins in 2015, and the findings reinforce a trend first identified last year by Edmunds that owners of alt-fuel vehicles are returning to traditional gasoline-powered vehicles in greater numbers than ever before.
Edmunds’ analysis found that a hybrid or electric trade-in is more likely to go toward the purchase of a SUV (33.8%) than another hybrid or EV. The trend is even more apparent when looking only at EV trade-ins—25.7% of EV trade-ins went toward the purchase of a SUV, compared to just 4.8% that went toward another EV.
This trend is not an indictment of the quality of these cars—hybrid and electric vehicles tend to be equipped with some of the most sought-after technology on the market today. This is an economics trend, since today’s low cost of gas no longer makes it worth paying the price premium of hybrids and EVs. And there are so many fuel-efficient vehicles on the market today that environmental concerns weigh less than they might have in years past. When you’re buying a vehicle that can get over 30 mpg, you can still say you’re doing your part to help the environment.—Edmunds.com Director of Industry Analysis Jessica Caldwell
|Vehicles purchased in connection with a hybrid or ev trade-in. 2016 data consists of 5,724 hybrid and EV trade-ins captured through the end of March. Data: Edmunds.com. Click to enlarge.
Most of those making the switch from alt-fuel vehicles to SUVs are opting for the most fuel-efficient sub-segment of compact crossover SUVs. Edmunds found that 16.4% of hybrid and EV trade-ins this year went toward compact crossovers. By comparison, only about 1.4% went toward a gas-guzzling purchase of a large SUV or crossover SUV.
The overwhelming popularity of SUVs trumps just about any other trend in today’s market. SUV sales are up 22% in the last five years, and almost every other segment has suffered as a result. It’s especially true for hybrids and EVs, which generally don’t offer the size that today’s shoppers crave.—Jessica Caldwell
Edmunds’ trade-in analysis comes at a time when overall electric and hybrid sales have struggled. The alt-fuel category saw a 10% drop from Q1 2015 to Q1 2016, while the overall industry saw a 3.3% lift during that time. Plug-in hybrids, however, have shown strength. A successful redesign of the Chevrolet Volt and the introduction of some new models such as the Audi A3 Sportback e-tron and the Hyundai Sonata Plug-in have helped the segment’s sales jump more than 40%, from 7,652 sales in Q1 2015 to 10,932 sales in Q1 2016.