Research Paper: Demand for Suvs, Hybrids

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[. . .] For drivers who need large utility vehicles like trucks for works, hybrid technology has proved to be disappointing. Overall, the "the hybrid has a greatly-reduced towing capacity and payload, which is most likely due to the addition of the electric motor and batteries" ("Advantages and disadvantages of hybrid trucks," Cars Direct, 2009). Given the higher initial purchase cost with reduced power, this has caused many to go with the non-hybrid option if they use their vehicles commercially and must rely on the vehicle in all weathers to do heavy-duty activities.

In terms of overall customer satisfaction, statistics indicate that it is relatively low for hybrids. "Only 35% of hybrid car owners bought a hybrid again when they purchased a new vehicle in 2011" (Kim 2012). Loyalty was low even in traditionally 'green' areas of the country like Oregon and California (which also have very high gas prices) and particularly low amongst Prius owners in comparison to other types of vehicles (Kim 2012).

Discussion

Several important points emerge from this comparison. The first is that not all of the 'bugs' regarding hybrid technology have been worked out. For many critical jobs which currently use trucks, hybrids are not practical. Also, consumers lose some power and other crucial components of the driving experience when using hybrids that they are reluctant to sacrifice. When given the choice, consumers often prefer SUVs, despite the cost of gas. And the newly-reformed SUVs of the present are a far cry from the older model's fuel inefficiencies. Hybrids may be more cost-effective in the long run, but in the short run, they suffer both in terms of sticker price and upon performance in the eyes of the consumer.

There is no doubt that using hybrid cars is considerably advantageous to the environment (see Fig. 1) and that using hybrid technology from a macro societal standpoint is very beneficial. However, it is difficult to ask consumers to make decisions that they do not feel are in their best interest, particularly if those decisions are related to a high-priced vehicle. Expecting that increasing gas prices will cause consumers to turn from SUVs to smaller hybrid cars does not seem to be supported by current statistics, including the high cost of depreciation of hybrids which must be factored into consumer decision-making, as seen in one 'pie chart' created by someone debating the costs of buying a new vehicle (see Fig. 2). Thus, other governmental pressures must be used (such as tax credits, the use of HOV lanes, or other incentives) if there is a desire to fundamentally shift the way that Americans drive.

Conclusion

The Prius was developed in Japan only after many years of government subsidies and long efforts by Toyota -- and it is still far from perfect. The political resistance President Obama faced after 'bailing out' Detroit indicates that support in the U.S. For a similar effort to produce an even better hybrid car would be unlikely, although the purely electric Chevy Volt of GM could be viewed as an American counterpart to the Prius. But sales of the Volt have been slow, and it also has a high sticker price.

After a hiatus after low demand, GM has begun to produce the Volt once again. "A new Low Emissions Package offered on 2012 Chevy Volts sold in California offers upgrades that reduce exhaust emissions, making the Volt eligible for access to California's carpool lanes. It also adds a $1,500 California state tax rebate. The Volt retails for $32,495 after a $7,500 federal tax rebate" (Crothers 2012). But this price tag still puts it out of the range of many consumers, who are very leery about a premium-priced 'plug-in' car.

Until technology improves considerably and prices of hybrids drop, selling the Volt and even the Prius will be a challenge. More government investment in the car industry to make this happen seems required, since Americans car manufacturers do not have the funds or the market demand to justify additional R&D, given the poor showing of these cars. Consumers and manufacturers focus on the short-term, but to reduce emissions requires a very long-term focus.

Appendix

Fig 1: Evidence of reduced CO2 burning with hybrid car (Image courtesy of Tree Hugger).

Figure 2: Perceived expense of hybrid cars (Image courtesy of Greenie & Techie).

Works Cited

"Advantages and disadvantages of hybrid trucks." Cars Direct. 22 Dec 2009. [10 Dec 2012]

http://www.carsdirect.com/green-cars/hybrid-trucks-advantages-and-disadvantages

Crothers, Brooke. "A new lease on life for the Chevy Volt as demand picks up." CNET.

8 Apr 2012. [10 Dec 2012] http://news.cnet.com/8301-13924_3-57411096-64/a-new-lease-on-life-for-chevy-volt-as-demand-picks-up/

"Greenie & Techie: Path to my first car, part IV." 12 Jun 2008. [10 Dec 2012]

http://undressmegently.blogspot.com/2008/06/path-to-my-first-car-part-4.html

Isidore, Chris. "What gas spike? CNN." 1 March 2011. [10 Dec 2012]

http://money.cnn.com/2011/03/01/news/companies/gas_price_hike_impact_on_february_auto_sales/index.htm

Kim, Susannah. "Hybrid car owners not buying again." ABC. 10 Apr 2012.

[10 Dec 2012] http://abcnews.go.com/blogs/business/2012/04/hybrid-car-owners-not-loyal-to-technology/

"Pros and cons: Is a hybrid car right for you?" Sun Journal. 19 Feb 2011. [10 Dec 2012]

http://www.sunjournal.com/prez-day-2011/story/971196

Restuccia, Andrew. "Obama: Think about ditching those gas-guzzling SUVs." The Hill.

2011. [10 Dec 2012] http://thehill.com/blogs/e2-wire/e2-wire/157263-obama-trade-in-your-suvs-for-more-fuel-efficient-vehicles

Smith, Steven Cole. "Gas-guzzling SUVs: Bombs or bargains?" Car and Driver. 2008.

[10 Dec 2012] http://www.caranddriver.com/features/gas-guzzling-suvs-bombs-or-bargains-feature

Smith, Michael Richard. Plug-in hybrid cars." 15 Apr 2008. Tree Hugger. [10 Dec 2012]

http://www.treehugger.com/cars/plug-in-hybrid-cars-chart-of-co2-emissions-ranked-by-power-source.html

"Tiger moms craving SUVs drive next wave of Chinese demand: cars." Bloomberg News.

19 Apr 2012. [10 Dec 2012] Retrieved: http://www.bloomberg.com/news/2012-04 -- craving-suvs-drive-next-wave-of-chinese-demand-cars.html

Tuttle, Brad. "How gas prices haven't affected SUV sales." Time. 18 May… [END OF PREVIEW]

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