Hybrid Sales increase year to year in May

Hybrid sales increased to 23,554 units sold, the best hybrid sales month ever. The number of hybrid SUVs decreased slightly from last month, but increased by over 2,000 units for the number of hybrid cars sold. Overall, sales increased 39% from last May.

Toyota was the biggest seller of hybrids with 17,190 hybrid units sold. The Prius sold as many units as they could make, although production right now is limited by the introduction of other hybrid units such as the Toyota Camry Hybrid. The Toyota Camry Hybrid had very strong initial sales of 3,032 units, while the other new hybrid vehicle, the luxury Lexus sedan GS 450h posted strong sales of 294 units. The Toyota Highlander Hybrid also sold 3755 hybrid units this past month, making up 35% of all Highlander sales.

Honda Accord hybrid sales are way down (60% decrease) from last year. The performance hybrid concept seems to be falling flat on its face. Meanwhile the Honda Civic Hybrid increased sales by 53% to 2890 units sold. The low production Honda Insight, scheduled to be axed in September, sold 92 units.

Ford sold 2862 hybrid units in the month of May combining sales of its Ford Escape Hybrid and its luxury twin, Mercury Mariner Hybrid. This was an increase of 132% over last year. Note they only sold the Ford Escape Hybrid last year in May, but the Mariner typically makes up only 8% to 14% of all hybrid sales for Ford.

The big news this month is for Toyota. By selling more than 60,000 hybrid units this year, they have crossed the tax credit line, initiating the tax credit phase out period. As of September 30, 2006, buyers of Toyota hybrids will be eligible for half of the tax credit. Two quarters after that, they will only be eligible for 25%. And two quarters after that, they get no tax credit.

It's too early to know how this will affect Toyota's sales numbers and if there will be a helpful boost to Honda or Ford (or GM when they introduce their hybrids). The Prius is the hybrid to own, so it is possible buyers will continue to buy Toyota, even without the federal tax credit.

President Bush and some legislators are currently thinking of dropping the tax credit sales limit.