Do Green Vehicles Correlate To Profits?

With gas predicted to reach $5 a gallon, consumers have become much more interested in fuel efficient vehicles. Truck and SUV sales have declined drastically in the past couple of years, the Prius has become the number one selling vehicle in Japan, and the Chevrolet Volt has been awarded car of the year. Hybrids and electric vehicles have obviously become much more popular in the public eye, but what does this mean for the manufacturers of these vehicles?

As of 1997, the Toyota Prius was the only mass produced hybrid vehicle on the market (not available in the U.S. until 2000). In 2005 there were four new hybrids introduced, with the most popular being the Honda Civic Hybrid. By the end of 2010 there were an astonishing 18 new hybrid vehicles introduced to the public. Obviously, hybrid vehicles are becoming much more popular to manufacturers and consumers.

When looking at the top five manufacturers by volume, which includes: Toyota, General Motors, Volkswagen, Ford, and Honda we noticed one key trend. All but Volkswagen have a significant number of hybrid or electric vehicles currently on the market. Although, Volkswagen only has one hybrid vehicle on the market today, they are, and have been well known for their turbo diesel platforms. As we know by reading our previous article about biodiesel, turbo diesel motors are extremely fuel efficient and have been known to outlast their owners!

We understand that the top manufacturers are offering vehicles in the fuel efficient sectors, but these are obviously not their only product offerings. Are these companies only selling these vehicles to get their foot in the door? Or are they actually profiting from this new trend?

According to a Nikkei report last year, Honda and Toyota are profiting roughly $3,100 on each of their hybrid vehicles, which is about the same amount as their non hybrid vehicles. With the Prius being the number one selling vehicle in Japan, it is becoming quite apparent why other manufactures are jumping on the bandwagon.

Manufacturers by volume:

1. Toyota: 7.2 million

2. General Motors: 6.5 million

3. Volkswagen: 6.1 million

4. Ford: 4.7 million

5. Hyundai Kia: 4.6 million

Manufacturers by hybrid models offered since 1997:

1. Toyota: 10

2. Honda: 6

3. General Motors: 6

4. Ford: 5

5. Chrysler: 3

Manufacturers by stock price (yesterday’s closing price):

1. Toyota: $84.44

2. Daimler: $72.19

3. Honda: $40.11

4. General Motors: $38.62

5. Peugeot: $32.18

Manufacturers by profits (ttm):

1. Honda: $7,400 million

2. Ford: $7,260 million

3. Toyota: $6,670 million

4. Volkswagen: $5,190 million

5. Daimler: $4,000 million

As you can see by looking at the figures above, it seems as though there is a positive correlation between green vehicles and profit. Almost all of the top performing companies in the automotive sector produce hybrid or electric vehicles, but it must be taken with a grain of salt as many of these companies operate in other industries as well.

From TheGreenFinance.org