The Free Market Flips Obama the Big Bird

By Robert Janicki

Do you remember President Obama's promise to put a million hybrid and/or electric cars on U.S. highways by the end of second term in office?  Well, there seems to be a major hitch in that plan.  It's failing miserably.  Obama is behind 800, 000 hybrid and/or electric vehicles and the market for these vehicles is declining precipitously.

The auto-research group Edmunds.com found that “22 percent of people who have traded in their hybrids and [electric vehicles] in 2015 bought a new SUV.”

This number is higher than the 18.8 percent that did the same last year, but it’s double the number that traded in their electric car for an SUV just three years ago. Edmunds.com reports that only “45 percent of this year’s hybrid and EV trade-ins have gone toward the purchase of another alternative fuel vehicle, down from just over 60 percent in 2012. Never before have loyalty rates for alt-fuel vehicles fallen below 50 percent.“ 

You don't have to be an economist with a Ph.d. to understand the cause of this phenomenon.  As the price of gasoline has dropped significantly, so has the financial motivation to buy hybrid or electric vehicles that promise lower operating costs relative to the higher previous price for gasoline.  The fact that alternative fuel costs and electrical prices have risen, only adds to the disincentive to buy a hybrid or electric car.
If that isn't enough disincentive, here's the deal breaker for those who really look to the future of electric vehicles.

Electric cars also suffer from issues with battery life. Each hybrid or electric car battery can cost thousands, or even tens of thousands, of dollars, which only helps tip the economic scale in favor of traditional vehicles. This number is higher than the 18.8 percent that did the same last year, but it’s double the number that traded in their electric car for an SUV just three years ago. Edmunds.com reports that only “45 percent of this year’s hybrid and EV trade-ins have gone toward the purchase of another alternative fuel vehicle, down from just over 60 percent in 2012.”

“It wouldn’t make sense to replace a 12-year old battery with a new battery that’s going to last 12 years, because chances are the car’s not going to last that long,” Eric Ibara with Kelley Blue Book told Detroit News.

Never before have loyalty rates for alt-fuel vehicles fallen below 50 percent, Edmunds notes.