Industry experts cite multiple factors affecting sales of hybrid and electric vehicles in California including falling gasoline prices and the increase in hydrogen fuel cell cars.
(TNS) — Are hybrid and electric vehicles losing their juice in California, far and away the nation’s leading market for those auto segments?
On the surface, the answer is yes. Up the road, experts believe that electric vehicles in particular are due to take off.
“Sales of alternative-powered vehicles have not kept pace with the rest of the new vehicle market,” the Sacramento-based California New Car Dealers Association noted in its recently released report on statewide new motor vehicle registrations recorded in the first half of 2016.
Through six months this year, CNCDA said sales of new, conventional hybrids accounted for about 4.5 percent of all new-vehicle sales statewide. That’s down from nearly 7 percent in 2013. The CNCDA report showed that California sales of new, plug-in hybrids and electric vehicles (EVs for short) have remained basically flat since 2014, with each segment accounting for about 1.5 percent of all new-vehicle registrations statewide. Between 2010 and 2014, plug-in and EV sales were rising.
That might not seem like cause for alarm, considering that overall new-vehicle registrations statewide in the first half of 2016 totaled more than 1.04 million. The CNCDA is projecting 2.1 million registrations by the end of this year, which would approach the all-time record of 2.15 million set in 2005.
However, the recent hybrid/EV slump is significant in a state that has consistently led the nation touting the virtues of alternative-powered vehicles, a state where Gov. Jerry Brown has set a goal of putting 1.5 million zero-emission vehicles on the road by 2025.
What’s going on? Industry experts cite multiple factors affecting sales of hybrids and electrics in California.
“It’s a combination of things for consumers,” said Brian Maas, president of the CNCDA. “There is a correlation between (consumer) interest in alternative-power technologies and the price of gasoline … which has been low this year. … Combine that with the fact that conventional internal combustion engines are getting much better gas mileage than they were five to 10 years ago.
“(EV/hybrid) technology costs more on a vehicle-to-vehicle basis, and some consumers are looking at (less expensive) internal combustion engines and saying, ‘Yeah, I’m not sacrificing a lot.’”
Maas also believes that pent-up consumer demand for sport-utility vehicles and crossover vehicles that get good fuel mileage has diverted some attention away from hybrids and EVs. He’s also confident that attention ultimately will swing back toward hybrids and electrics: “Things change when gas prices go the other direction. Someday, that will happen, and when it does the market will reflect that.”
Longtime local dealer John Driebe, who heads the ForAnyAuto Group and sells Nissan, Infiniti and Mazda vehicles in the Elk Grove Automall, has seen a surge in crossover and SUV sales at his dealerships, particularly the Nissan Rogue and Mazda CX-5.
“I think we have been seeing that change to the SUV lifestyle, and basically, there are not a lot of hybrids in those models,” he said. “Throw in the low gas prices, and it just leaves fewer people leaning toward a (Toyota) Prius or a plug-in.”
Driebe also believes that loyal buyers of hybrids and electric vehicles are making a commitment to a cleaner environment.
So does Judy Cunningham, a sales consultant at Roseville Toyota in the Roseville Automall. Cunningham has overseen sales of the groundbreaking Toyota Mirai, a hydrogen fuel cell electric vehicle that was introduced to the California market in fall 2015.
Cunningham believes sales of the limited-production Mirai are directly tied to the availability of hydrogen fueling stations: “If more stations were in operation, the sales of the Mirai would have been far better.”
She added: I don’t think the Mirai customer is as easily swayed by low gas prices as maybe the buyer that would consider a hybrid if gas prices rise. Most of the inquiries I have received are from people in complete support of the technology but live in the wrong ZIP code to make the car work for them at this time. California will see a rise in H2 vehicle registration as these stations continue to come online, regardless of where gas prices may be. By the year 2020, we will have 100 stations statewide. The fuel cell market will look very different then.”
Bill Elrick, executive director of the West Sacramento-based California Fuel Cell Partnership, noted that hydrogen fuel stations continue to be built throughout California – more than 20 now, compared with just a couple in 2015.
The infrastructure for electric vehicles is much further advanced, with EV charging stations being built on both coasts.
Last week, Campbell-based ChargePoint Inc., which bills itself as the world’s largest EV charging network, said U.S. motorists can now travel the most heavily trafficked corridors on the East and West coasts with the installation of 95 new DC fast charging stations. Fast chargers can power an EV battery to 80 percent capacity in 30 minutes. The West Coast chargers stretch from San Diego to Portland, Ore., along the Interstate 5 and Highway 101 corridors.
EV charging infrastructure is growing locally as well.
Last week, the Hyatt Regency Sacramento hotel, at 1209 L St., formally opened 26 Level 2 EV charging stations, most of them on the fifth floor of its parking garage, calling it the largest such installation by a private enterprise in the city.
George Parrott, president of the Sacramento Electric Vehicle Association, is adamant that the recent slump in EV sales in California is “an anomalous blip” based in part on false consumer perceptions that relatively low gas prices will stick around long-term.
Parrott believes continuous development of the driving range of EVs and the ever-growing network of charging stations will spur sales of electric vehicles in the near future: “This ripple will turn into a wave. Going forward, this market is going to explode.”
Understandably, Sacramento-area auto buyers are torn about what to do: buy a cheaper, internal-combustion engine car; or consider a hybrid or electric, which costs more but will likely pay off in fuel savings in the long run.
“We’re really watching our budget, so I’m leaning toward small SUV,” said Sacramentan Jan Graham as she made the round of several dealerships at the Elk Grove Automall. “We’re pretty planet-conscious in our house, but we’re also trying to be smart shoppers. We feel like we can get a right-size SUV with good gas mileage and feel pretty good about ourselves.”
At the Folsom Automall, 38-year-old Folsom resident Stan Wayne said he wants to get more seat time in plug-in electrics, but for now, a moderately priced hybrid is on his shopping list: “Gas prices are going to go back up. It’s only a matter of time, so getting great fuel mileage is a priority for me and my family. … I like to keep a car for at least seven years, so maybe after that, if the (electric vehicle) technology is perfected and there are more charging stations everywhere, I’ll make the switch to electric.”
©2016 The Sacramento Bee (Sacramento, Calif.) Distributed by Tribune Content Agency, LLC.