Until last month, American hybrid car manufacturers could rest assured that, if nothing else, the nation’s market for the vehicles at least exceeded Japan’s. Data shows that in 2006, Japan sold just one hybrid for every 4.3 sold in the U.S. But now, Japan has surpassed the U.S. in demand for the hybrids, with approximately 8 percent of new vehicles sold in June being hybrid (versus the U.S.’s approximate 2.6 percent). Analysts suggest that Japan’s astronomical gas prices (a whopping $4.50 a gallon), enticing tax incentives, and new products are to blame.
Japan produces several well-known hybrid models, including the Toyota Prius, the nation’s most popular hybrid model, and the Honda Insight. Not even a seven-month waiting list for the Prius reigned in hybrid sales. (To meet the demand, Toyota increased staffing at Prius-producing facilities and allowed overtime hours. It produced a whopping 50,000 vehicles in a month.)
Can America re-claim its lead in the hybrid sales race? Possibly. The government’s provision of competitive tax incentives for hybrids would be a step in the right direction. Currently tax incentives for hybrids are focused on plug-in hybrids (or PHEVs), considered to be the “next generation” of hybrids. Even these won’t be available until late 2010 at the earliest (2011 for GM’s Chevy Volt).
While America’s relegation to second place in the hybrid car market is not encouraging from an auto sales standpoint, it may not be completely bad news for the environment. Hybrids do, after all, burn fossil fuels (albeit less so than traditional autos), and therefore contribute to global warming. Moreover, the government is taking additional measures to promote alternative fuels and “clean” transportation, including its “Cash for Clunkers” program (which allows trade-ins of aging, fuel-inefficient vehicles). And in the end, while second place isn’t first, it’s better than not running the race at all.