A Wall Street Journal editorial today talks about how California’s decision to let 85,000 hybrid owners get stickers so that they could drive in the HOV lane without carrying extra passengers drove up the demand and pricing for the Prius and the Civic Hybrid.
It’s an interesting look at how the economics of buying a hybrid change when you can use them to shave serious time off your daily commute.
The sticker distribution did exactly what it was supposed to do. People wanted to shave time off their commute, and the stickers drove up demand for hybrids for the Toyota Prius and Honda Civic hybrid (the only cars that qualified for stickers), so much so that the small Prius has been selling for over $30,000, and until recently had waiting lists. The Civic hybrid has carried a dealer “added premium” to the manufacturer’s suggested list price of as much as $4,000 (with the hybrid Civic total price nearly $7,500 higher than the quoted price of a non-hybrid Civic).
But it seems that the hybrid HOV program, rather than suppressing automobile use, did the exact opposite: The program was wildly popular, and the HOV lanes became clogged. Californians began talking about “Prius backlash.”
