Light trucks helping to fuel a boost in green vehicle sales

Sales of fuel-efficient vehicles saw a major increase in the first half of 2017, according to the automotive site Edmunds.com. Their analysis suggests that a diversification of options has helped improve the appeal of green vehicles, since light trucks now make up a much larger share of this market.

The analysis defines green vehicles as those that use fuels other than gasoline or diesel. These include hybrids, plug-in hybrids, electric vehicles, and hydrogen fuel cell vehicles.

A total of 266,488 green vehicles were sold in the United States between January and June, an increase of 21.5 percent from the same period in 2016. Green vehicles accounted for 3.2 percent of all vehicle sales, with this market share up 24 percent from the previous year.

Edmunds.com notes how green vehicle sales in the first six months of the year decreased for three consecutive years before the recent increase. It credits the recent reversal to the availability of larger models into the green vehicle lineup, such as crossovers and SUVs. While light trucks only accounted for 5.2 percent of green vehicle sales in 2012, their share of the green vehicle market currently stands at 22.9 percent.

"If automakers want car shoppers to adopt green technology, they can't just offer it exclusively in a little econobox," said Jessica Caldwell, executive director of industry analysis at Edmunds.com. "While the styling of the iconic Prius used to be trendy, consumers today don't necessarily want a vehicle whose design screams 'green car.' And as tastes have taken a dramatic turn away from passenger cars, and battery technology improves, automakers have an opportunity to drive adoption forward by offering electric powertrains in vehicles shoppers actually want."

Although gas prices have been subject to seasonal fluctuations, they have stayed fairly low since a prolonged slump in the autumn of 2014. The national average price for a gallon of gasoline has not exceeded $2.50 since the end of the summer of 2015, according to AAA.

In 2013, when the average price of gas was $3.59 a gallon, there were 294,989 green vehicle sales in the United States. This accounted for 3.8 percent of the market share, a year-over-year increase of 19 percent.

Average gas prices fell only slightly to $3.54 a gallon in 2014, but the number of green vehicle sales also dropped to 288,861 and a market share of 3.5 percent. A steeper drop in gas prices in 2015, to an average of $2.46 per gallon, reduced green vehicle sales to 242,104 – 2.8 percent of the market share.

This share slipped even further in 2016, dropping to 2.5 percent as the average price for a gallon of gasoline fell to $2.07. Edmunds.com says there were 219,342 green vehicle sales in this year.

While the analysis credits the increasing prevalence of light truck models with the resurgence of green sales, it also points out that electric and plug-in hybrid sales have increased by 45 percent in the past year. One out of every 100 vehicles sold in the first half of 2017 was an electric or plug-in hybrid model.

Edmunds.com says the expiration of federal tax credits for electric and plug-in hybrid vehicles may put a damper on these sales. The Internal Revenue Service says this credit will be phased out for individual automakers over the course of one year after the quarter where the automaker sells at least 200,000 qualifying vehicles.

Sales figures show that General Motors, Tesla, and Nissan are nearing this cap. GM, whose models include the electric Chevrolet Bolt, was up to 142,961 sales at the end of the second quarter of 2017. The electric automaker Tesla reached 121,410, while Nissan—maker of the electric model Leaf—had a total of 110,845 sales at the end of the quarter.

"Americans tend to buy cars based on emotion," said Caldwell. If automakers can home in on the right products that excite buyers without the carrot of government subsidies, EVs have a much better shot of going mainstream at a quicker pace."

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