Hybrid Cars — Saving the Environment or your Wallet?
Starting roughly half a decade ago, mass vehicle consumerism switched to a more economical sentiment. With the declining state of our environment — greenhouse gas emission, burning fossil fuels, and global warming in general — car companies took an environmentally friendly approach to increase their sales. By offering hybrid vehicles and later on fully electric ones, companies enticed consumers to buy these cars. Their seemed to be a pressing public demand to help save the environment, and one way to do so was by reducing the amount of car emissions and turning electric.
Although many people individually shared this specific sentiment, there are other reasons as to why the hybrid boom occurred. The initial surge to purchase hybrids and electric cars may have been propelled by the “save the environment” campaign, and after that, consumers, whether or not they really wanted a hybrid themselves, jumped on the band-wagon to save the environment. This resembles an information cascade — the initial consumers who made the switch gleamed with positivity and pleasure, convincing everyone else that the switch to electric vehicles was the optimum decision. The remaining converters saw how “happy” their friends were and how reasonable hybrid car advertisements were, so they swapped their gas-guzzling cars out for eco-friendly ones.
However, the amount of hybrid purchases has declined recently and seems to remain on that trajectory. The state of our environment in no way has significantly changed to persuade consumers to switch back to fully gas cars. So why are people switching back? According to Lawrence Ulrich, there seemed to be a more underlying direct-benefit for people to initially purchase hybrids, and they have lost that benefit. Gas prices skyrocketed in 2012. This significantly disappointed drivers due to the costly nature of filling up a gas tank. At one point, gasoline prices reached upwards of $4.00 a gallon. This is absurd, and many people shared that same attitude, especially those driving big SUVs getting very low gas mileage. To save a lot of money, consumers switched to newly fashionable hybrids and electric cars. Sure they were helping save the environment, but ultimately they wanted to save their wallets. The direct benefit of reducing the amount of money each fill-up cost at the gas station was merely supplemented by the fact that these new hybrids were relatively comfortable and economical.
The recent decline of hybrid and electric car purchases supports the idea that the hybrid boom was propelled not really by information cascades, but because of direct benefits. The price of gasoline has declined back to an acceptable, if not agreeable, rate. Thus, car owners who originally bought hybrids to reduce their cost of transportation now see less of an incentive to continue driving them. Many people are reverting back to their fully gas cars which, to them, are more powerful, comfortable, and seem like “the car for them.” This analysis derives from some facts described in Ulrich’s article, but mainly from extrapolation there of and reasonable inferences.
Source:
http://www.nytimes.com/2015/05/15/automobiles/wheels/with-gas-prices-less-of-a-worry-buyers-pass-hybrids-cars-by.html