Hybrid-Car Competition Heats Up: Does the Toyota Prius Finally Have a Worthy Challenger?

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Ford Motor Company

Ford C-Max

In January, Ford sold five times as many hybrid vehicles as it did the year before. New hybrids from Volkswagen, Honda and pretty much every other automaker also mean that Toyota, which has dominated the market for years with its hybrid Prius, better be ready for quite a fight.

Without a doubt, consumers are curious about plug-in vehicles like the Chevy Volt and the all-electric Nissan Leaf. But when it comes time to purchase, the consensus is that the vast majority of buyers will keep on turning to cars that are powered mainly by gasoline.

According to a J.D. Power survey published last year, the majority of consumers (71%) indicated that the next car they buy or lease would be a regular, old-fashioned gas-powered vehicle. Almost one-quarter (23%), meanwhile, said they’d be most likely to purchase a conventional hybrid such as the Toyota Prius or Ford Fusion Hybrid. Only 4% pointed to the plug-in hybrid (Chevy Volt) as the car they’d buy next, and just 2% said their next automobile would be a purely battery-powered vehicle like the Nissan Leaf.

The takeaway is that automakers expect to be selling a lot more traditional hybrids than they will plug-ins for some time to come. By far, the top dog in the hybrid category is the Toyota Prius, which has not only been on the market longer than almost any of its peers, it has managed to push beyond its original niche status and become a best seller around the globe.

(MORE: What Would Make an All-Electric Car Appeal to the Masses?)

But every year, the Prius faces more competition as other automakers roll out new and improved hybrids. Ford, for example, recently unleashed the C-Max, which has been hyped as its “Prius fighter.” Impressively, in its first full month of sales, the C-Max Hybrid outsold the Prius V, which is the larger, family-friendly version of the Prius that the C-Max competes with most directly.

Bloomberg reported that January was a record month for Ford hybrid sales, which increased by a factor of five compared with the same time a year ago. Around 6,000 Ford hybrids were sold last month, compared with about 1,200 in January 2012. With such a start, Ford executives anticipate that its 2013 hybrid sales total will blow away its current annual high of 35,496, set in 2010.

Beyond rising sales, two bits of data concerning hybrid purchases are getting Ford particularly excited: per the Detroit News, a high percentage (70%) of Fusion Hybrid purchases come from “conquest buyers” (consumers who previously drove another car brand, not a Ford); and Fusion Hybrid purchasers tend to be slightly younger than the typical hybrid owner. As one Ford executive explained:

‘We’re bringing new hybrid buyers into the market, many of whom wouldn’t be considered traditional hybrid buyers,’ said Amy Marentic, Ford’s marketing manager of global small and medium cars. ‘There’s a sense hybrid buyers represent a pragmatic or green ethic.’

(MORE: Will the EPA Change the Way It Measures MPG Ratings? Maybe Just for Hybrids?)

It’s difficult for automakers to woo drivers away from another brand, and it can be maddeningly complicated for automakers to sell cars to younger consumers, so any progress that can be made on one or both of these fronts is considered a great success for Ford.

Even so, a little perspective is needed on Ford’s hybrid-sales data. One reason sales have risen so sharply is that they were so weak in the past. The C-Max may have outsold the V version of the Prius last fall, but it sure as heck didn’t outsell all Priuses. Toyota sold around 236,000 Priuses in the U.S. last year, a 73% increase from 2011. The Prius has become the top-selling car in California (it’s the best seller period, not just for hybrids), and Toyota should expect to average more than 20,000 sales monthly in 2013 in the U.S. Ford, by contrast, is happy because it managed to sell 6,000 hybrids last month.

This doesn’t mean that Toyota can kick back and rest on its laurels with the confidence it’s got the hybrid market wrapped up. Slowly, Toyota has been losing market share of hybrids — down to 60%, after being 68% not long ago — while Ford’s share of the market has increased from 7% to 16%.

And Ford is hardly Toyota’s only competitor in the hybrid market. Every automaker seems to have a hybrid that’s new to the market or will be soon. One of the most eagerly anticipated is the 2013 Volkwagen Jetta Hybrid, which stands out because, unlike the typical hybrid that can feel like a glorified golf cart, this car is supposedly fun to drive and really moves when your foot hits the gas pedal. A WardsAuto review put it this way:

The engine makes the Jetta hybrid arguably the most compelling parallel hybrid yet because it delivers great fuel economy at a competitive price and reinforces the European joy of driving. It’s truly sporty.

(MORE: Why the New Ford Fusion Is the Most Important Car, Like, Ever)

So while the Prius is undeniably the champ among hybrids, and it is likely to hold the sales crown for a long time to come, every year it’ll face tougher contenders — and just plain more of them.

12 comments
ThomasRockford
ThomasRockford

Would never buy anything but a Prius! It’s a good value all around (not just sticker price)…I fill it up once a month for $15 (thanks Gas Buddy)… It costs $25/month for insurance (thanks Insurance Panda)… It has excellent resale value. And is cheaper to buy than a lot of other options. Not to mention it never needs repairs.

RonaldKramer
RonaldKramer

Open letter to Ford:

 I thought my 2013 C-MAX would be a Prius Killer? NOT! As a returning Ford buyer I feel deceived. I want to support US companies and US jobs. What was Ford thinking when they published 47/ 47/47 estimates? Based on the advertised EPA estimates, I would have been ok with low 40's but 28-33 mpg is not even in the ballpark. This is not an issue about EPA testing standards, but rather an issue about setting false customer expectations in order to promote sales. Ford's "47MPG" marketing campaign tarnished what should have been the roll out of a truly remarkable vehicle, the CMAX. Real world MPG estimates should have been promoted in the mid-30's. No one would have questioned those numbers and the CMAX would have received the accolades it deserves. How these MPG estimates made it through Ford corporate is beyond me! Maybe it was the rush to go to market? I have been accused of not knowing how to drive hybrid. For the record, during the last three years I have leased both a 2010 Prius and 2010 Honda Insight Hybrid, and consider myself an experienced hyper-miler. My mileage in the Prius is 50 plus, the Insight is 40 plus. The C-MAX is a well-built car, with extremely inflated EPA estimates. I respectfully request that this matter be investigated as soon as possible. My efforts to deal with this locally and through Ford customer service have frustrated me to no end. The constant response? "You need to learn to how to drive hybrid type of vehicle ". Is there a difference how I drive Prius Hybrid vs. the CMAX hybrid? I think we all know the answer to that. I need someone at Ford to reach out to me and assist in a proactive manner so we can put this matter to rest.   Ronald Kramer Yankee Ford CustomerSouth Portland, Maine

RonaldKramer
RonaldKramer

I thought my 2013 C-MAX would be a Prius Killer? As a cross over buyer I feel deceived. I want to support US companies and US jobs. What was Ford thinking when they published 47/ 47 estimates? I would have been ok with low 40's but low 28-33 is not even in the ballpark. I have been accused of not knowing how to drive hybrid.  I own both a 2010 Prius and Insight and consider myself an experienced hyper-miler.  The C-MAX is a great car, with extremely inflated EPA posted estimates. 

Ronald Kramer
Yankee Ford Customer
South Portland, Maine

cezarypi
cezarypi

The plug-in hybrids are most interesting of the bunch, however, there are no nice models available to buy. The VOLT has the right power train  features but is too wimpy and too expensive for the class of car it is. Its interior looks like a toy for kids with all the plastics in the dashboard. The TESLA is now the nicest, but it's electric only, and uses lithium batteries which all of us who use laptop computers know don't last that long, and it's even more expensive. I say no one has yet come out with the right configuration: plug-in hybrid with a decent electric only range, powerful, elegant, at a reasonable price.

lotatoys
lotatoys

Ford is temporarily basking in the glow of their EPA ratings but real-world drivers are getting nothing close to those. Toyota's EPA ratings are more realistic in real world driving. The one thing Toyota needs to learn from Ford is the interior quality and design. I don't want to look at the center of a cheapo-plastic dash to see find the speedometer. Add some soft-touch plastics or at least give the car a feel that it's not a tin can with a plastic inner shell and offer more luxury features like power/memory seats. Ford has that part nailed but Toyota has the mechanical/mileage part figured out.

BFast
BFast

Andy has a nice fallacy thing going there, I agree. The funniest part about it is that, in FACT, hybrids are being purchased by intelligent and educated and well-informed customers. That cannot even be argued. 

Everyone had a knock against hybrids until Toyota showed that they just work... like your toaster or stereo. Replace the battery because it is lame? As far as I know, nobody has had to do that... nobody I know of anyway. All I hear from Prius drivers is that they love them to death and drive them all the time. They sell them for great prices and go buy a new one. They have enough power, excellent gas mileage and low emissions. They are the car of the future.

Someday we will (almost) all be driving hybrids. Brad Tuttle wants to bait us with this notion that Toyota is afraid of competition. I say no way. Just as Ford is growing from a small base, Toyota's market share is counting down from 100. Besides, all this imitation just shows us that the hybrid was THE right thing to do and Toyota got there first.  It is licensing its technology just like Sony licensed Walkman technology. That is the way to make money for nothing and make your technology ubiquitous. Everybody is going to win because Toyota took a big risk. All on its own. Early.

Thanks Toyota. And just as Time made "The computer" the man of the year in 1983, I nominate THE PRIUS as the man of the year of 2013. Both changed society in important ways.

AndyAhern
AndyAhern

Until batteries get replaced with flywheels or super capacitors, hybrids will never be purchased by educated consumers. 

Greekgeek
Greekgeek

@AndyAhern This educated consumer whose family is full of scientists, and who was waiting for hybrid technology to get the kinks worked out enough to buy one -- I skipped the original Celica-sized Prius model for that reason -- bought a Prius in 2004 and has loved it every day since.  

The battery's purring like a kitten. Sure, it'll wear out sooner or later, and cost more than a conventional battery to replace, but the dollars I've saved by not having to purchase gas more than once or twice a month will offset it. (Also, the years I spent commuting 2 hours on California freeways in the carpool lane were a nice perk, although not the reason I bought the car). Gas has been over $4 a gallon many times since I bought that car, because of where I live. It's saved my bacon: usually I can hold out until they drop back down, or at least make very few purchases while the gas prices are spiked. 

And I can report that it came through a nasty collision like a champ, as well.

Hybrid technology has been around for decades, and it's been quite reliable in cars for over a decade. When are people like you going to educate yourselves about 21st century technology?

For that matter, I was examining plugin conversion kits for Prius in 2005. They weren't ready for prime time then, but they are now. My next car will be a plugin, as, once again, I wait for the first wave of cars with a new tech to work out the kinks before buying in. But I expect to be driving my Prius for many years, until the mileage of new cars is so appreciably better that I'd be insane to stick with my pokey little 41mpg. 

DeweySayenoff
DeweySayenoff

@AndyAhernAn educated customer doesn't fall for the either/or fallacy you presented.  

Absolutist statements are not normally the purvey of an educated person because an educated person knows that things change.  There is nothing in physics which mandates that batteries wear out in an uneconomical time frame - especially when longer-lasting ones are in demand.  Given the resources that are being put into researching that very question, the educated person can expect someone to come up with batteries that are much more economical (either longer-lasing or no more expensive to replace than a transmission which ALSO wears out) than the ones they have now in the relatively near future.

Flywheels and super capacitors aren't going to cut it.  The former has mechanical difficulties standing in the way while the latter has physics working against it..  Both represent MUCH higher rates of catastrophic failure given the energies required to keep a ton and a half of mass moving, let alone during acceleration, and the torque forces acting on them in the normal operation of the average passenger vehicle.  Neither are viable today as an existing technology.  Fuel cells will be far more likely to replace batteries than flywheels or super capacitors.

Educated customers are more likely to go with something that's available than wait around for a science fiction answer to a current problem.

AndyAhern
AndyAhern

@Greekgeek You realize VW makes TDI powered vehicles that are cheaper to purchase and maintain and more fuel efficient than the Prius, right? "Hybrid" is nothing more than a great marketing term.

MarcoSampaio
MarcoSampaio

@AndyAhern @Greekgeek

TDI are not cheaper to maintain than a hybrid. Just count the parts one needs to replace: clunch, turbo, inter cooler, particles filter, belts. Sorry if I forgot some, but these are not in Prius and are replaced more than once during the TDI Iifetime.