High Gas Prices Helps Hybrid Industry
C H I C A G O, May 24, 2004 -- Suburban Chicago resident Rick Nosek has a fitting way of explaining why he bought a hybrid car.
"I was watching gas prices going up, and I was getting tired of paying through the nose,"Nosek said.
He and his wife, Lynn, drive a Toyota Prius. They say it costs only $13 to fill it up, so they are a lot happier at the pump.
"It feels great, I tell ya. It's phenomenal," he said.
There was a four to six month wait for a new Prius even before gasoline prices went north of a $2 average.
With hybrids like the Prius getting 40 miles or more to the gallon, the current gas price spike could fuel demand even further.
"Hybrid really is a buzzword right now. People are talking about them. People are looking at them," said Charlie Vogelheim, executive editor of Kelley Blue Book.
For years, Honda, with its hybrid Civic, has been the only competition for Toyota, but that's about to change.
First Hybrid SUV
Later this summer, Ford will roll out a new hybrid of its Escape model.
"With these higher gas prices this year, I think we have excellent timing. I think there will be a significant request for such a product," said Dr. Gerhard Schmidt, vice president of research and advanced engineering at Ford Motor Co.
The Ford Escape is the first hybrid SUV, but it will not be the last.
"I think the Ford Escape Hybrid is just the tip of the iceberg. I think you will see hybrids in virtually every product segment over the next 50 years or so," said Morgan Stanley auto analyst Stephen Girsky.
Small Slice of the Market
Still, hybrids right now are a small slice of the market. Analysts estimate 100,000 may be sold this year — out of 17 million new vehicle sales in all.
It is important to note, however, that hybrids are more expensive than their conventional counterparts — several thousand dollars more expensive.
So a hybrid owner won't really save money unless gasoline gets a lot more expensive.
And it will never get a lot more expensive than it is now. Or will it?