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    Saturday, May 04, 2024

    Few electric and hybrid trade-ins go toward similar purchase, analysis finds

    Nearly three-quarters of the drivers who traded in an electric or hybrid vehicle in the first months of the year have opted to purchase a different kind of vehicle, according to an analysis by the automotive site Edmunds.com. The report says these drivers were more likely to purchase an SUV than they were to purchase another electric vehicle or hybrid.

    In the first quarter of 2016, 27.5 percent of 5,724 electric and hybrid vehicle trade-ins recorded through March were applied to the purchase of another electric or hybrid vehicle. This share was down from 38.5 percent in the first quarter of 2015.

    An increasing share of electric or hybrid vehicle drivers is opting to purchase an SUV. A total of 33.8 percent of these drivers applied the trade-in toward an SUV, up from 29 percent at the start of 2015.

    Drivers who were trading in purely electric vehicles were much less likely to favor the same type of vehicle for their next purchase. While 4.8 percent of these trade-ins were applied to another electric vehicle, 25.7 percent went toward an SUV purchase.

    Jessica Caldwell, director of industry analysis at Edmunds.com, says most segments have seen a decline in sales as SUVs regain popularity. In the past five years, sales of these vehicles have gone up by 22 percent. Sales of alternative fuel vehicles have dropped by 10 percent between the first quarter of 2015 and the first quarter of 2016. Caldwell says these drivers are likely to give up this type of model if they need a larger vehicle, since alternative fuel vehicles tend to be smaller.

    The improved fuel economy of most gasoline-powered models is also likely a major factor in this trend. Indeed, 16.4 percent of these trade-ins went toward a compact crossover SUV, the most efficient option in the segment. Only 1.4 percent of those trading in an electric or hybrid vehicle opted for a large SUV or crossover.

    "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," said Caldwell. "This is an economics trend, since today's low cost of gas no longer makes it worth it paying the 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 miles per gallon, you can still say you're doing your part to help the environment."

    A total of 12.1 percent of electric or hybrid vehicle drivers used their trade-in to purchase a compact or subcompact car, up from 8.9 percent in the first quarter of 2015. The share of drivers applying the trade-in to a luxury model was 11.5 percent, up only 0.4 percentage points from the previous year. A total of 5.3 percent opted for a truck, up from 4.1 percent in 2015.

    However, the report also noted an increase in the popularity of plug-in hybrids. This segment has seen the introduction of new models and the redesign of old ones in recent months. Sales of plug-in hybrids increased more than 40 percent from the previous year, from 7,652 in the first quarter of 2015 to 10,932 in the first quarter of 2016.

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