Cheap Fuel Prices Setting Back America's Domestic Hybrid Car Market

Gasoline prices are down from $4 a year ago to $2.60 in some parts of the country. The unexpected turn in prices has many Americans flocking back to gas guzzling trucks and SUVs, making a tidy profit for car companies but setting back the trend of more fuel efficient and environmentally friendly vehicles.

A new car may outlast cheap petroleum, meaning pain at the pump when fuel prices rise, but American consumers have a short memory when it comes to buying cars, said Stephanie Brinley of the global financial and energy company IHS.

Inexpensive fuel has allowed Americans to resist the kinds of vehicle purchases they have been uncomfortable with:

“American motorists also remain sceptical of hybrids, plug-ins and battery-electric vehicles, despite ever-larger numbers of these types of car going on sale. Although more than 100,000 plug-in vehicles are likely to be sold in America this year, sales in that sector are not growing as fast as the car market as a whole.”

While the short-term sales of gas guzzlers is good for car companies’ bottom line, it could eventually set them afoul of coming fuel efficiency standards. New federal regulations are set to take effect in 2016, and by 2025 the government wants all autos to travel at least 54.5 miles per gallon.

In his Big Think interview, energy specialist and former Central Intelligence Agency director James Woolsey, argues that our nation lost seven years of technology development when the second Bush administration prioritized hydrogen cars over plug-in hybrids.