The Correlation Between Hybrid Cars and Gas Prices

Making the point that hybrid car sales are very dependent on gas prices might be like saying fish can't breathe well out of water, but I wanted to see how strong the relationship is. So, I went to the Energy Information Administration website for a month by month chart on the price of gas. Then I took the hybrid car sales I've been tracking for the past three years and plotted them together.

If anything, I'd say the relationship was extremely strong and very obvious. The correlation coefficient was very high at 0.855, in case you were wondering.

Since the number of hybrids sold tends to jump whenever a new model is introduced, I show when each model (full hybrids only) I am tracking was introduced. The Insight was a low production hybrid, so not the number of hybrids sold that month was not really affected, even thought the number of models goes down from 9 to 8.

I was also drawn to the big jump made in hybrid car sales a couple of months ago. Toyota had started to aggressively sell the Prius and it showed when the Prius had its best sales month up to that point.

There are some other factors that affect hybrid car sales such as production capacity (limited the Prius for several months) that cause the relationship to be less than 1-to-1, but it's fairly obvious how strong related the two are.