SUV Sales Are Up Thanks to Falling Gas Prices

It was hard to crack open a paper on January 1†without reading about “relief at the pump” for drivers of fuel-burning cars: Across the nation, average gas prices are hovering around $2 a gallon, with a few outliers, and the global glut of oil supplies is responsible. Oil prices have consistently remained below $40 a barrel, which leaves consumers paying much less for fuel, and projections suggest the trend will continue through 2016. That’s not a good thing, for a number of reasons, among which is a common rebound effect that occurs whenever gas prices start to fall: SUV, large truck, and crossover vehicle sales are rising. Many get less than 20 miles to the gallon, in contrast with high efficiency cars and electric or hybrid vehicles, which can get mileage ranging from the 50s to over 100 miles per gallon or charge.

There’s a strong correlation between prices at the pump and what people are driving, which suggests that consumers still aren’t interested in addressing the environmental concerns surrounding the widespread presence of SUVs and other large vehicles ó many of which people don’t strictly need, but drive as status symbols or in the mistaken belief that they’re safer. The inability to modify driving habits in light of incontrovertible evidence about climate change is a grim reminder that people are likely not modifying other harmful habits as well, which spells trouble for nations attempting to lower carbon emissions as well as the planet as a whole. Public figures†like the president and other world leaders have pointed out that the only way to effectively counter climate change is to make permanent shifts in the way we live, rather than making purchasing and lifestyle decisions on whims, but people aren’t listening.

Gas prices overall have been taking a dive, with 2015 being the second cheapest year on record. Correspondingly, sales of SUVs, light duty trucks and crossover vehicles spiked up over the same period, while sales of cars fell, dramatically in some classes. It was a profound and dramatic illustration of an extremely strong correlation that automakers take shameless advantage of ó when gas prices were high, many rolled out a family of hybrid and electric vehicles to appeal to consumers, and now that they’re falling again, they’re rushing to meet the market with new models of larger vehicles to cater to consumer tastes. That translates to big profits for dealerships and automakers. The result is that overall average mileage is down in the U.S.

Since many consumers clearly can’t be persuaded to do the right thing for the environment, other economic incentives ó and possibly penalties ó need to be considered to encourage people to abandon cars altogether when possible, to purchase or rent more fuel-efficient models when they do need cars, and to engage in activities like ridesharing to lighten the load on the roads and the environment. Since controlling gas prices would constitute illegal price fixing, the government can’t tackle the problem at the pump, but it can look elsewhere.

For example, it could return to the historic practice of offering tax credits or offsets to people who purchase vehicles that†reach mileage targets, something that rewards consumers and automakers alike ó and it could reignite†Cash for Clunkers to get old, inefficient cars off the road but require people to purchase fuel-efficient vehicles with the proceeds. Issuing more HOV vehicle permits and rewarding drivers who carpool not just with perks like dedicated lanes, but also free tolls and free or low-cost parking (many regions offer discounted, but not free, tolls to carpool drivers with the right tags) could also help consumer demand grow. Increasing consumer demand can put the pressure on automakers to shift the focus of their production.

It may also be time to levy more direct pressure on auto manufacturers from other angles. After representing itself well at the Paris climate talks in December, the U.S. needs to continue putting it out on the line for the climate, and that includes cutting emissions across the industrial sector. In addition to encouraging factories to cut down on polluting practices and institute better controls on pollutants, secondary pollution like that generated from the cars and other equipment these companies sell should also be considered in carbon cap and trade activities. If consumers can’t be compelled to act from a sense of social obligation and a desire to protect the environment, or through incentives to purchase economic cars, perhaps narrowing their options by making the production of cars with low fuel economy impractical is the best way to strike to the heart of America’s love affair with oversized vehicles.

Photo credit: The NRMA

40 comments

Siyus Copetallus
Siyus Copetallus2 years ago

Thank you for sharing.

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Monica R.
Monica R2 years ago

Slap high taxes on those dammed SUV's!

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Marie W.
Marie W2 years ago

SUVs are the oil company's dream.

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Muriel Servaege
Muriel Servaege2 years ago

Unfortunately, people are not so willing to change their habits. They should forget SUVs, etc. and do more physical exercise (walk, bike, ...)

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M Quann
M Q2 years ago

Thank you.

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Donn M.
.2 years ago

I have a small SUV. I wouldn't have anything else given where I live and the kind of trips I try to take every year. About time for a new one too.

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Muff-Anne York-Haley

This is not a good thing!

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Anne Moran
Anne Moran2 years ago

Less SUV's ,, and more use of transit, walking, biking and ride-sharing...

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Susie Reynolds
Susie Reynolds2 years ago

Most of the SUVs and MPVs I drive past seem to have one occupant: the driver, and rarely the number of people that the number of seats would suggest should be in them. If we are serious about trying to cut emissions, reducing our reliance on fossil fuels and tackling climate change then this is not the way we should be going. We need our governments to pass legislation that gives subsidies to buyers of smaller cars with less powerful engines (preferably not powered by fossil fuels), and not sit back and let sales of these massive gas guzzlers and air polluters increase unabated.

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Debbie Williamson
Solitary Eagle2 years ago

How stupid are we?

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