US vehicle sales are slumping nationwide—a sign of a general economic slowdown. But it’s interesting to see exactly how they’re slumping. Figures from Autodata (spreadsheet link) show that, for calendar year 2008 to date, passenger car sales are down about 3 percent. But light truck sales are off by a whopping 12 percent. Take a look.
The truck decline was even steeper in March; passenger car sales were off 5.4 percent, but truck sales were down a whopping 17.8 percent, compared with March ’07. Overall, US car sales outpaced truck sales last month—which, as I understand it, rarely happens these days.
Meanwhile, hybrids zoomed off the lots this January—with sales up 27 percent from the previous year—but slowed a bit in February. Still, hybrids were up slightly from the previous year, when measured as a share of total vehicle sales.
Admittedly, most of this is based on preliminary data. The story may change. Still, from everything I can gather, high fuel prices (coupled with a slow economy) are really beginning to have an effect on the kinds of cars we’re buying.
That is good news, of course, in terms of fuel conservation. The big question remains: WHY are people buying light trucks and SUVs? Certainly, there are many people who need the hauling capacity, occasionally, but I would venture to say that very, very few drivers of those vehicles make use of their specialized features often enough to justify them.It is not just a question of fuel, either. Pickups and SUVs represent much more steel, plastic and other resources than the automobiles they replace. Maybe it is more a question of people coming to their senses than it is high fuel prices. If that is actually the case, then perhaps their is still hope for our species.
People who can afford new vehicles can maintain mobility by purchasing high-mileage cars. We did that by purchasing a new Prius last year. Wow does that car go a long way on a little gas.However, lots of people can’t afford a new car. All these folks need to choose from the used-car market which will be crammed full of SUVs and gas-guzzling trucks for a decade. The used car fleet has the mpg of the new car fleet from the last 15 years.Vehicles last a long time and the people who bought all these gas-guzzlers new can now walk away from their bad decisions by buying hybrids. The wealthy have a get-out-of-carbon-jail-free card. The less wealthy will have to struggle to carry on their lives in aging, low-mpg used car fleet coupled with ever increasing carbon prices. Carbon taxes and cap-and-trade impose flat tax rates on carbon. The poor have less flexibility to respond and less money to pay the flat rate AND they get the inefficient infrastructure hand-me-downs from the wealthy.Something has to change in this scenario we are creating for ourselves. Graduated carbon taxes…or personal carbon allowances…or something. We can’t shift all the carbon pain to the less wealthy and expect either social stability or big carbon cuts.
I agree completely Barry. I have spent countless hours mulling over the transportation and many other sustainability issues, and the sad fact I cannot seem to navigate around is that the surface of the leverage point is covered with the poor that have to be crushed in order to move anything. They get hit first, one way or another, from their lack of mobility. Any local utopias we manage to create are cost-prohibitive of course, but my first example is always people who can barely keep their cars on the road commuting to their minimum-wage job every day.How can we get around this? When that question is answered we will finally see some positive progress.
While I agree with the accusations made above about the used car market, I think this market does a decent job of translating features like mileage and reliability into prices. I’d be surprised if the resale value of gas guzzlers is the past couple years hasn’t been dropping like recent housing prices.Barry makes another more interesting point that I’ll phrase as: our economic system does a poor job of allocating resources the more they are both finite and essential. Figuring out who gets what and how much becomes more difficult and more important. The answers don’t matter much when it comes to mp3 players or coffee, but the more we consider placing limits on not-so-elastic demands for driving, home heating and the like, the more we see near term conflicts with other policy goals like affordable housing, healthcare and healthy diets. (topics, btw, that have come up several time in the past on Sightline). So, I’ll indulge in the opportunity to point out that large income disparities are a significant barrier to environmental policies that try to use ‘market’ based tools, like tolls, carbon taxes, carbon trading systems, etc. In this light, pursuing a more balanced income distribution is part of good environmental policy strategy.
Daniel, you are right that current efforts to restrict carbon all result in raising the price uniformly for consumers, regardless of income. This seems true of both cap & trade and carbon taxes. It is also true of our non-regulation of demand which is causing supply shortages worldwide and thus price hikes where the hike in price is going to oil companies instead of trans formative energy options.I strongly think the science shows we absolutely have to dramatically reduce ghg emissions…and soon.But I also think that flat taxing of carbon will not work. It will hammer the poor and lower middle class into economic and social misery long before it will cause any significant carbon reductions by the upper middle class and wealthy. Research shows that carbon emissions are strongly tied to wealth. The well-to-do are responsible for the majority of emissions. There is no way to make any sizable cuts in ghg emissions without the well-to-do leading the way. It’s just pure math. My concern is that our policies of “limit supply and distribute to those who can pay” will lead to widespread hardship and pain long before they lead to large emissions cuts.One solution is to have personal allowances/rationing. This level could be high enough to avoid any restrictions on the lowest emitters in society. Another solution would be a rebate to everyone to cover a certain level of carbon taxes per person. BC did a one time rebate of this kind with their new carbon tax. But it would need to be monthly and continuous i think if it were to work. We need to do something quick in our discussions and policies.
Morgan, I agree that the used car market does take into account mpg and current gas prices into resale values. But there is a fundamental limitation: buying gas for most used vehicles is far more money than the cost of that vehicle. Let’s use the national average of 17,000 miles per year and look at some numbers. At $2/gallon, the cost to drive an average SUV/Truck (14mpg combined) is about $2,500. At $4/gallon it is $5,000. At current european prices of $6.50/gallon it is $9,000. People struggling to maintain mobility in used-car market won’t be able to afford to buy gas for SUV/Trucks even if you gave them the car. The market can’t price cars below free. But SUV/Trucks have been over 50% of the new car market for years. Another comparison: $4/gallon it costs $1,500 a year to buy gas for a Prius (46mpg) and almost $5,000 to drive an average big SUV or full-sized pickup (14mpg). That’s $3,500/year savings. That’s $35,000 per decade.I live in a community where most people i know are stuck buying used-cars for under $4,000 in price. They just don’t have the dollars saved or the ability to pay higher monthly payments. SUVs and mini-vans are what they can afford to buy…but no longer to buy gas for. The used-car prices for the small portion of the used-car market that is high mpg are sky high now. Supply of high-mpg used-cars is far below demand. Price of gas is far bigger cost than used vehicle itself. Many folks live paycheck to paycheck and don’t have the dollars to enter the high-mpg market.And it’s not just cars. It is all carbon infrastructure. The wealthier folks are the ones buying the new stuff. The poorer folks will be stuck trying to shove ever more costly carbon into it for life’s basic needs.
I think annual VMT is around 9k miles per capita, at least according to CTED. Nevertheless, add in purchase price, insurance and repairs, such costs argue firmly in favor of ditching the cars and moving into town where we can walk, bus or rent/share a vehicle. don’t they? In this light, what is the remaining rationale for living in, say Carnation and commuting to, say Seattle?
You are right Morgan, my 17,000 annual miles figure is high. I had km in my brain as i live in Canada. EPA says: “12,000 miles per year for passenger cars, and over 15,000 miles per year for light trucks.” That could jibe with your CTED data of 9,000 per person, as people share cars.Even at 9,000 miles, the cost to drive 14mpg vehicle has increased a $1,000 dollars per year in the last couple years. As carbon restrictions and supply problems continue that delta will rise rapidly.The basic point remains that even at a purchase price of zero, used-SUV/Trucks are becoming too expensive to drive for people in the lower income brackets. And SUV/Trucks have been >50% of the new car market for years…so probably they will remain 50% of the used-car market for years. You are right that the rationale for suburbian sprawl is disappearing. That’s a good thing. But the same forces that give the well-to-do a way out of terrible carbon decisions they made with cars applies to housing as well. I think affordable housing prices force many lower income folks into the outer-suburbs and require commuting to jobs offered in most cities. I believe Seattle and King county have a much higher median home price than Snohomish, Pierce or Kitsap for example. As it becomes more and more expensive to live outside the city…and more and more carbon-restrictions apply to those that live in suburbia…the more expensive city housing will become. We have to figure out how to restrict ghg emissions without forcing the less-wealthy majority to compete directly based only on dollars with the wealthier minority.
One last response to your original comment, Morgan: I completely agree with your second part where you say: “our economic system does a poor job of allocating resources the more they are both finite and essential. Figuring out who gets what and how much becomes more difficult and more important.”That’s a great phrasing and the nub of the problem.With ghg emissions, Professor Stephen Pacala of Princeton (co-author of the “Stabilization Wedges” paper) says his latest research shows that less than 8% of humanity is responsible for 50% of ghg. Pacala: “the top 500 million people emit half the greenhouse emissions. These people are really rich by global standards. Every single one of them earns more than the average American and they also occur in all the countries of the world.”So we have an problem where big cuts can only come by restricting ghg emissions of the wealthiest top 8% of humanity. Yet all our tools are based on flat carbon pricing and the marketplace. If we allocate fossil fuels only on price we will never get the ghg cuts we need. Long before the wealthiest 8% have to make big cuts, the less wealthy majority of humanity will be squeezed out of the marketplace and reject the system.Even if you want to be ruthless, Pacala’s numbers show that totally restricting all emission from 85% of humanity would only get you something like 25% or 30% in emissions. I strongly second your conclusion: “large income disparities are a significant barrier to environmental policies that try to use ‘market’ based tools”So