Are SUV Hybrids Simply Wishful Thinking in Detroit?

Is Detroit now beating a dead horse with the SUV hybrid concept?

By Brendan Moore


Just a few days ago, a Chrysler LLC spokesman mentioned that Chrysler was considering putting a hybrid engine into the redesigned Dodge Ram pickup due out shortly. The hybrid engine would be available in the 2010 model year of the Ram.

Chrysler is planning on launching a hybrid 2009 Chrysler Aspen and a 2009 Dodge Durango Hemi Hybrid this summer. Both models are struggling in the market. The Aspen and the Durango have been taking their lumps in terms of declining sales for many months, and the recent huge swing away from the SUV market has only increased the speed at which their unit sales are falling.

General Motors has two entries in the full-size SUV market; the GMC Yukon and the Chevrolet Tahoe, virtual twins underneath the different badges. Since their market introduction in January of this year, the two models together have sold only 1,100 units, an anemic figure. GM had planned on selling 12,000 of the full-size SUV hybrids a year, and that figure looks unreachable at this point, unless GM starts discounting the vehicles heavily through rebates, etc.

The gas/electric hybrid engine in the almost-3 ton AWD Yukon/Tahoe bumps up fuel economy from around 14 mpg in the city to 20 mpg, but the improvement in fuel economy doesn’t come cheaply. The hybrid engine option increases the price of the vehicle over $4000 USD, from an average of approximately $49,000 USD to a whopping $53,000 USD, and that’s before ladling on a lot of options.

The Chevrolet Tahoe Hybrid was anointed as the in November 2007 at the Los Angeles Auto Show, and GM was expected to extract some marketing value from that award, but it hasn’t worked out that way yet.

The problem for GM is that the market has moved away from the SUV and the pickup. No matter how good the Tahoe Hybrid is (and it is an engineering masterpiece), consumers are abandoning the SUV market like rats jumping off a sinking ship as gasoline continues its inexorable climb towards $4.00 a gallon in most of the country. The market shift has been sudden and sharp, and vehicles like the excellent Tahoe Hybrid will left behind in change. As opposed to the last 15 years of the SUV fad, it won’t be long at all until 95% of all new SUV buyers will own an SUV because they actually need one. And then, the question becomes, out of that number of buyers, what percentage of those buyers will be willing to pay the price premium for the hybrid?

Yes, small fuel-efficient cars are where it’s at now. A market reality accepted publicly by many manufacturers in the last few weeks as they have announced increased production of small cars, acceleration of plans to produce hybrids or electric cars, and, if applicable to the manufacturer, corresponding cutbacks in truck and SUV production.

So, Chrysler is rolling out their truck/SUV hybrids. I’m not saying it wasn’t a good idea a year ago, or even six months ago, but in light of how consumer preferences have changed lately, I think it’s a safe assumption that the Chrysler Aspen Hybrid (to offer but one example) is going to land with a resounding thud in the marketplace. Ditto for the Dodge Ram hybrid pickup. And anything else that is huge and has a hybrid powertrain in it. Chrysler is going to experience the same problems GM is currently having in trying to sell huge hybrid vehicles.

It seems that out of the Detroit 3, Ford has chosen the best path in light of the way the market has changed. They’re not spending money putting hybrid powertrains in vehicles that less and less people want to buy; they’re going to offer their full-size pickup trucks and SUVs with conventional engines (some of those engines will be smaller than in the past, though), and they are planning on making far, far fewer of them in the future. Their resources are going to small cars, no matter what the propulsion systems.

I think the full-size SUV with a hybrid system is going be more or less a strategic cul-de-sac for Chrysler and GM; a production and marketing distraction for them when they need no distractions, a blind alley that does nothing for them in the short term. No matter how much trumpeting the companies do about the fuel economy of these vehicles, the sales results just aren’t going to be there, because fewer and fewer people want those vehicles, no matter what is under the hood in the next several years.

Longer-term, yes, they need the hybrid engine in these things so that they can continue to sell them to whatever reduced amount of consumers and businesses that need a vehicle like a Dodge Ram or a Chevrolet Tahoe. But, short-term, it is delusional to think that the addition of a hybrid option is going to reverse, or even slow, the slide in sales in the full-size truck/SUV segment.

COPYRIGHT – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Techshake Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at .

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  1. I feel good driving around in my SUV and I don’t care about other people trying to make me feel guilty for driving something I like. I might buy a hybrid SUV, but only because I want to buy less gas, not because of any liberal whining about the environment or energy use. I’ll buy a hybrid SUV when gasoline gets more expensive and the extra price can be justified by the reduced money I have to spend for gas. The math isn’t there yet. For all the people that want want to buy small cars, that’s your right just like it’s my right to drive something that will squash that little car. See how much satisifaction you get from saving some pennies on gas when you’re in the ICU! Be an American, not a Euro-Weenie!

  2. Like the Chrysler Airflow of 1934, Renault Avantime and lots of others, the idea of hybrid SUV might be ahead of its time or could be a little late to the SUV party depending of where we take position. However, was it because of some biais showed by some peoples and some medias? The Tahoe hybrid was Green Car of the Year 2008 by . If Toyota had launched a big Sequoia hybrid, I guess we have no need to think what could happen next.

    Now, let’s put a limited edition of these on the Zeta platform or the 300C/Charger/Challenger (until optionnal diesel arrives)

  3. beef jerky is the poster boy for what has been wrong with people’s attitudes towards the consumption of energy in this country for so long. Not to mention the whole passive-aggressive fantasy about driving a big SUV and crushing little cars. A nice little case study in insecurity.

  4. The only saviour of SUV’s and Pickups will be the next generation of diesel engines.

    Give them a bit of stop/start technology and be done with it.

  5. A hybrid SUV is probably the wrong direction. For the cost, the savings is marginal.

    If you regularly tow with it, a diesel makes far more sense. If you don’t tow with it, then something like Ford’s planned “eco-boost” technology is a better bang for the buck.

    For a road trip of any length, most folks take the larger of their vehicles, as the bigger vehicle will be more comfortableand will have more cargo room. We take the Expedition, not my car, for a trip of any length, and a hybrid does nothing for you on the freeway.

  6. hybrid SUV’s are quite a funny concept….the only one I’ve ever seen is one from Lexus and as just pointed out….the hybrid component is only useful around town. On the open road…it’s dead weight.

    Diesel might not save you either. The cost of the ultra low sulphur diesel is now similar to premium petrol due to the additional refining costs, the low worldwide refining capacity for ULSD and the ever increasing demand. Given the roughly 8 to 10% premium that is being asked for most diesel vehicle models over their petrol siblings then there might be heartbreak.

    On the Oz market, the new Holden Commodore (Pontiac G8) diesel has bee suggested as becoming available at up to a $4K premium over the V6…with the fuel economy suggested for the TDi, assumming 20,000km per annum and the current 12% premium for diesel here, GoAuto suggested that the payback time for that $4k premium would be as much as twelve years and the car’d have a quarter million kilometres on it…

    Of course, all this depends on the market price in your country/state but there’s one example where it has gone a bit pear shaped.

  7. beef, you’re a boob

  8. I think you’re right – if it’s huge people are making the sign of the cross and running away with gas prices the way they are. Not walking, but running away.

    Maybe you could drain the fuids out of all the sur SUV and pickups and use them for a huge artificial reef on the Atlantic Coast. That would be good for the environment!

  9. beefjerky wrote: “For all the people that want to buy small cars, that’s your right just like it’s my right to drive something that will squash that little car.” His humorous post is not a rare sentiment. Look for a roll-out of legislated and court-sanctioned dis-incentives to own and casually operate ‘defined-as-large’ vehicles like SUVs. John-Q-Public & his state & federal legislators will successfully get mandatory punitive damages enacted in vehicle accident cases, awarded not to compensate the plaintiff (smaller vehicle) but to deter the defendant (SUV driver, etc) and similar persons from operating their SUV on public roads. The legal and regulatory infrastructure is already in place (think truck-passage restrictions defined by weight/drivetrain) to ban defined-as-large vehicles from certain roads, and to charge far higher tolls, and licensing and testing fees. The aforementioned punitive awards will kill off the insurance market for casual driving of defined-as-large vehicles. The legal infrastructure on ownership & use in-place for farm implements will serve as a boilerplate for new laws & regulations for those who document they “must use” defined-as-large vehicles for commerce/livelihood on public streets. Like sausage-making, this transition will be an ugly process. But legislators will be easily armed with web-postings like beefjerky’s, to document the danger & therefore the need, and to build public support; as we know, reader postings can not be retracted or erased from 3rd-party server back-ups. And rightly or wrongly, this will be a no-brainer for skittish politicians looking to demonstrate they’re ‘doing something’.

  10. A Hybrid SUV, huh? Good luck with that, Detroit. A plug-in Malibu or a plug-in Focus would go gangbusters, but those hybrid SUV’s are going to rust on the lots.

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