Hybrid Nation?

<p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3">My Toyota Prius just turned 100,000. That’s quite a milestone for a car and it may be a harbinger of things to come. Many planners are betting so-called “peak oil” will undermine our car culture because we won’t have the fuel to feed them. The history of my Prius suggests otherwise. </font></p>

September 5, 2007, 8:27 AM PDT

By Samuel Staley

My Toyota Prius just turned 100,000. That's quite a milestone for a car and it may be a harbinger of things to come. Many planners are betting so-called "peak oil" will undermine our car culture because we won't have the fuel to feed them. The history of my Prius suggests otherwise.

When my Prius was "born" in 2001, hybrids were an oddity. Toyota sold fewer than 15,000 of the cars in the U.S., despite the fact the technology had already been proven in Japan. It even subsidized the retail price of the car, using it as a loss leader to build a new market.

In 2003, my Prius had been sitting on the lot for six months, unwanted, until the salesman gave me a deal to roll it home. It's diminutive size reminded us of the family car Fred Flintstone "drove" using his feet to power it along. So we named it "Fred".

Despite these humble beginnings, Fred has been great. In fact, he's still running on his original rear brake pads. We had the front pads replaced on its 100,000 birthday. We change the oil every 5,000 miles, and it hums along, often silently, reliably getting 48 mpg.

Now, driving in 2007, my decision to buy Fred looks brilliant. Gas prices bumped up to $2 per gallon by the end of 2004. By the summer of 2005, prices had eclipsed $3 per gallon in many parts of the nation, particularly on the coasts. Refinery bottlenecks, reformulated gas mandates, Nigeria, uncertainty created by pesky South American socialists, and a protracted military presence in the Middle East conspired to keep prices relatively high.

Hybrid sales jumped along with gas prices. Hybrid sales are on track to sell 345,000 by the end of the year according to JD Power & Associates. Toyota continues to be the leader, wracking up more than half of all hybrid sales. But this is the tip of the iceberg. JD Power speculates that 65 hybrid models will swarm onto the market by 2010. Toyota alone has a corporate strategy targeting 600,000 sales in the U.S. early in the next decade. The next generation will advertise fuel efficiency approaching 70 mpg (or more).

Hybrids are still a small part of the overall car market, but it is a growing segment. And this bodes well for the future of the automobile. The technology is improving, potentially building into all automobiles resilience to environmental regulation and eventually dwindling oil supplies. So, reports of the death of the automobile and automobility are greatly exaggerated. We need to make sure we plan for more mobility, not less.

Samuel Staley

Sam Staley is Associate Director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he also teaches graduate and undergraduate courses in urban and real estate economics, regulations, economic development, and urban planning.

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