With an all-electric range of 6 miles from full to empty, and a ‘blended’ gasoline + electric range of 11 miles from a full charge, the 2014 Toyota Prius Plug-in Hybrid is the smallest-range plug-in car on the market today.
Yet U.S. sales of Toyota’s first mass-produced plug-in hybrid topped 2,692 cars in the month of May, setting an all-new record for the model. Even though sales were lower than May during the month of June at 1,571 sales, the Toyota Prius plug-in Hybrid still leads Chevrolet’s range-extended Volt EV on year-to-date sales.
Other cars — like the Ford Fusion Energi Plug-in Hybrid — are also experiencing a massive boost in sales of late, showing a clear move towards plug-in technology among the car-buying public.
But why are cars like the Toyota Prius Plug-in Hybrid and Ford Fusion Energi Plug-in Hybrid selling so well? And what can we learn from their successes?
Brand familiarity, brand loyalty
Without question, part of the reason Toyota’s plug-in Prius and Ford’s Fusion Energi plug-in hybrid are selling so well is a firmly entrenched brand loyalty among customers.
With more than ten years of hybrid sales under its belt, Toyota’s Prius line has become a synonym among mainstream car buyers for fuel economy, frugality, and environmentally conscious motoring. Now reaching the end of its third generation of production, many Prius customers are on their second — or even third car. Trading up to a Plug-in Prius when it’s time to switch cars is a logical and familiar move for them, since the plug-in Prius contains all the familiar features of the hybrid Prius but adds the benefits of a limited-range EV, such as the ability to make all-electric local trips.
Similarly, Ford’s plug-in Fusion offers existing owners the chance to trade-in their existing, familiar Fusion to something with a plug without worrying about losing all the things that made them a Fusion customer in the first place. And with cumulative U.S. sales totalling more than 1.6 million cars, Ford has a lot of existing Fusion customers to convert to a plug-in.
A simple solution to range anxiety
Rather than confront customer’s worries about all-electric range anxiety, Ford and Toyota’s approach to plug-in vehicles — even though both brands currently offer all-electric ‘compliance cars’ in select markets — has been to offer gasoline engines as a familiar, reassuring backup for when all-electric range isn’t enough.
In fact, both brands have used the very spectre of range anxiety, playing on their customer’s misgivings about all-electric cars, to sell their plug-in hybrid vehicles as being superior to all-electric options.
Add this to the simple fact that both the Ford Fusion Plug-in Hyrbid and Toyota Prius Plug-in Hybrid offer better gasoline-only fuel efficiency than the Chevrolet Volt — even though the Volt wins on all-electric and overall combined fuel efficiency — and it’s easy to see why so many car buyers are choosing the Fusion and Prius plug-ins over all-electric models.
All the perks
Like all-electric cars on sale in the U.S. today, those buying plug-in hybrids like the Toyota Prius Plug-in Hybrid and Ford Fusion Energi Plug-in Hybrid, are eligible for up to $7,500 (depending on the car’s battery pack size) in Federal tax credits. Depending on the state, plug-in hybrids also attract a varying amount of local incentives, further reducing effective purchase price for owners.
A point of note: while both the Ford Fusion Energi and Prius plug -in Hybrid (eligible for $4,007 and $2,500) in rebates respectively) are not eligible for the full $7,500 in Federal tax rebates, their lower sticker price over all-electric models means that more buyers are tempted to opt for plug-in over all-electric.
In addition to incentives, most plug-in hybrid owners in the state of California are eligible to apply for a free green HOV-lane access decal, giving them unlimited single-occupant access to the state’s many hundreds of miles of carpool lanes. With notorious traffic jams along its major arterial freeways, paying extra for a plug-in car to save hours on the weekly commute makes economic sense — even if the person buying the plug-in car never intends to plug in.
And if the person buying the plug-in car doesn’t intend to plug-in all that often, it makes sense to buy a plug-in hybrid with good gasoline-only gas mileage over a range-extended electric car with poorer gasoline-only gas mileage.
Aside from all of the reasons we’ve listed above, both the Ford Energi plug-in hybrid and the Toyota Prius plug-in Hybrid look no different to their non-plug-in siblings. Unlike the Chevrolet Volt, Nissan LEAF, Mitsubishi i-Miev and BMW i3, the plug-in Prius and the Fusion Energi look like normal, gasoline-guzzling cars.
For someone who isn’t keen on overtly promoting their green credentials — or for someone who prefers to blend in with the crowd — both cars offer a more conventional appearance and to some extend, more conventional operation, since they can be driven on gasoline or electricity.
Despite not having the most efficient or best equipped plug-in cars on the market, both Ford and Toyota have made massive gains in the plug-in market by the associations made with existing brands. With plug-in cars offered as an addition to an existing car range, it’s also easier for dealers to push customers towards the higher-ticket plug-in variant of a car, especially if a customer has already partly committed to buying a particular model.
Like upgrading the trim package, upgrading to plug-in capabilities is an extra bonus many car buyers will consider, when switching to an entirely new plug-in vehicle may be out of the question.
For other car companies however, there are two different options to meeting — and beating — Toyota and Ford in the market place.
The first is to offer more competitive pricing on plug-in models, making them compete more directly with limited-range plug-in hybrids. The second is to offer more plug-in transitional vehicles: vehicles which offer range-extended plug-in hybrid drive trains but retain the look and functionality of a well-known, beloved brand.
As to getting more people in electric rather than plug-in hybrid cars? That’s a tougher challenge: but current incentives for plug-in hybrids — especially limited-range plug-in hybrids — are simply too large. While current rebates focus on emissions and battery pack size over range, incentivising customers to buy longer-range plug-ins would help encourage more car buyers to choose longer-range plug-ins.
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