Hybrid sales fall with gas price

The average price of gasoline at the end of last month was about $2.60 a gallon - the cheapest petrol has been in late August since 2004, according to AAA's national survey.

"Prices should continue to fall this autumn due to declining demand and the switchover to winter-blend gasoline," the auto club added.

Cheap gas has, on average, saved American motorists $750 a year. It also has triggered wholesale desertions from what had been the growing ranks of the Hybrid Owners' Army.

And in what numbers are these HOA troops going AWOL? According to a recent survey by Edmunds.com, an auto-industry research firm, 55 percent of hybrid and pure-electric owners are switching at trade-in time to conventional gas-powered vehicles, notably crossover SUVs.

"Generally speaking, the marketplace has shifted toward [gas-powered] small SUVs and trucks," said Erica Gartsbeyn, marketing and communications manager for the Toyota Prius hybrid.

Though the defection from hybrids is being driven by low-priced fuel, the shift is a bit more nuanced than that. Part of the hybrid's problem is that its conventional competitors have become more fuel-efficient, thus diminishing the difference in gas economy.

Second, and more important, falling fuel costs have greatly increased the time it takes to save enough on gas to cover the extra cost of the hybrid. For example: Back in 2012, when gas was $4 a gallon, a Toyota Camry Hybrid buyer driving 15,000 miles a year could save enough on gas to cover the hybrid model's $3,800 price premium in five years. Today, payback would take almost twice as long.

Cheap gas has seriously wounded the sales of both new and used hybrids. Toyota's Prius, the king of the hybrid hill, saw its sales drop 11.5 percent in 2014, to 207,000. It is down 15 percent so far this year, according to Toyota's Gartsbeyn.

She quickly added that the industry is down 17 percent, which means the automaker has gained market share while losing sales. (Not that the company needs more market share: Toyota and Lexus account for more than two-thirds of U.S. hybrid sales.)

Other manufacturers' models suffered a lot more, particularly the plug-in hybrids. Sales of Chevrolet's Volt plug-in were down 36 percent in the first half. Honda has ceased production of the Civic hybrid and Accord plug-in. The latter will be replaced next year.

Even Toyota could not escape the plug-in carnage. Its plug-in Prius was down 69 percent in the first half, so the company has ceased its production and won't replace it until late next year.

As those future plug-in replacements might suggest, the industry has hardly given up on the hybrid. Indeed, Toyota will officially unveil a redesigned 2016 regular Prius on Tuesday. It will be in the showrooms by early next year, Gartsbeyn said.

Chevrolet will offer a completely redesigned 2016 Volt this fall. It will have more range and a lower price tag than its predecessor.

There are two main reasons why the automakers haven't folded their hybrid hands. The first is the belief that the price of petroleum, a finite resource, will eventually go back up. As Gartsbeyn put it: "This is a cyclical business, and Toyota looks at it as a long-term process."

The other reason is increasingly stringent federal emission standards.

"I don't know how you can meet the regulations in terms of emissions without electric vehicles," Renault-Nissan CEO Carlos Ghosn told reporters in New York recently.

Happily, the Automotive Lord giveth as well as taketh away. The shift to crossovers and trucks has been profitable for the automakers. Heftier truck sales added $500 million to GM's first-quarter profits.