HEVs Outperform Ailing Auto Industry in 2009



Buoyed by rising year-end sales, hybrid electric vehicles (HEVs) captured an all-time high of 2.8 percent of total automobile sales in the U.S. in 2009.  Automakers reported total HEV sales of roughly 290,300 vehicles in 2009. 


The bimonthly Energy Futures newsletter, Hybrid Vehicles, has covered the HEV industry since the first HEV, a Honda Insight, was sold in the U.S. late in 1999.  The industry enjoyed eight years of double-digit growth before 2008.  HEV sales dropped for the last two years, by 7.8 percent in 2009 and 8.2 percent in 2008.  Despite the recent downturn, however, the HEV industry is still outperforming the U.S. automotive industry by a wide margin.  In 2009, total U.S. new car sales were down 21 percent, for example. 


Because HEV sales are outperforming the overall market, HEVs continue to steadily increase their market share.  The 2.8 percent market share for HEVs in 2009 is up from 2.4 percent in 2008 and 2.0 percent of total sales in 2007.


Five automakers currently market nearly all of the HEVs sold in the U.S.  In 2009, Toyota divisions sold 195,545 units HEVs, or 67.4 percent of the total sales in the U.S. market.  The top selling Prius posted sales of 139,682 units, and alone accounted for 48.1 percent of all U.S. HEV sales.  Honda ranks second.  Its HEV sales rose 13 percent in 2009 to 35,692 units, while total sales of all vehicle types for the company fell 19.5 percent.  The rise in HEV sales was due solely to the successful launch of the new Honda Insight. 


Ford Motor Company also saw significant gains in HEV sales in 2009.  For the full year, Ford HEV sales set a new record for the company, and were up 72 percent versus a year ago.  The company ranks in third place among HEV manufacturers, and is closing in on Honda.  GM and Nissan also sold HEVs in the U.S., but their sales were miniscule. 


Toyota’s Woes


For a couple of weeks in January, it seemed like Toyota’s HEV lineup would avoid the recall of 2.3 million vehicles to correct sticking accelerator pedals.  A few days later, Toyota suspended sales of eight models involved in the recall, again excluding HEVs.  In February, however, the company’s safety problems spread to its HEV lineup, thought my many to be the best engineered vehicles made by Toyota and clearly the star in its vehicle portfolio. 


A voluntary safety recall was announced for approximately 133,000 model year 2010 Prius HEVs and 14,500 Lexus 2010 HS 250h HEVs to update software in the vehicle’s antilock brake system.  Toyota has responded to the problem with a production change for the 2010 Prius that improves the ABS system’s response time and the system’s overall sensitivity to tire slippage.  The similar production change is planned for the HS 250h.


Toyota is in trouble.  Customers are fleeing, prices in the used car market are tumbling and top officials are getting heat from Congress in widely publicized hearings.  After only recently assuming the top spot by ending GM’s multi-decade reign as the world’s largest automaker, Toyota is now in the hot seat.  It is too early to predict the long term effect of the recalls on Toyota or on the HEV industry at large.  It is clear that the shining star has dimmed.  After more than a decade of good news, we will now get a chance to how the HEV industry will react to the blush being off the rose.