As Southern California gas prices top $6 a gallon, dealerships are scrambling to keep hybrids, electric vehicles and other fuel-efficient cars in stock.
Nowhere is the dilemma more apparent than at Longo Toyota.
“We’ve had more than 1,000 customers place orders for the Sienna hybrid minivan,” said Doug Eroh, the El Monte dealership’s general manager. “And they’re waiting as long as six months to get a hybrid RAV4 Prime.”
Longo has seen its inventory shrink by leaps and bounds amid rising demand for fuel efficiency and an industrywide chip shortage that has slowed production of new vehicles.
The dealership typically has about 1,500 new cars and 400 used models on hand. But not now.
“Today we’ve got 50 to 100 new cars and less than 200 used ones,” Eroh said Tuesday. “When gas prices really started to shoot up two weeks ago, our orders reached a higher level than we’ve ever seen.”
Nearly half of Longo’s 2021 sales were hybrids, plug-in hybrids, all-electric vehicles or hydrogen fuel-cell electrics, which run on hydrogen and generate their own electricity.
Danny Choi recently bought a 2022 Toyota Mirai at Longo. The hydrogen fuel-cell electric model gets 76 miles per gallon in the city and 71 on the highway. It can go more than 350 miles on a full tank.
But that’s not even the best part.
“I bought it mainly for the economics,” the 53-year-old Buena Park resident said. “When you figure in the state and federal rebates, the rebate from Toyota and the free gas card Toyota gives you, my out-of-pocket cost was about $8,000 to $9,000.”
Toyota gives Mirai customers a $15,000 fuel card as a motivation to buy the vehicle.
“California is the only state where you can drive them because it’s the only place that has the hydrogen stations,” Choi said. “That’s the challenge … but it’s a beautiful car.”
A matter of economics
For years, the high cost of a new electric vehicle was at odds with cheap gas prices. But with fuel prices continuing to surge, the economics of a hybrid or EV makes more sense.
A recent U.S Department of Energy report shows that a Toyota Prius Eco hybrid gets 56 miles per gallon, for example, while a BMW i3 all-electric vehicle gets the equivalent of 113 miles per gallon.
Others, including various Tesla models, get the equivalent of 120 miles or more per gallon.
Raymond Philippe, 38, of Castaic bought an all-electric 2022 Tesla Model 3 Long Range car in February. The $58,000 car gets the equivalent of 136 miles per gallon in the city and 123 per gallon on the highway. It can go up to 358 miles on a single charge, according to industry tracker caranddriver.com.
“I love it,” said Phillipe, who works as an engineer and sometimes drives up to 300 miles a week. “I’m also going to get a solar-powered charging unit for at home. That’ll save me even more money.”
Nissan of Mission Hills is also struggling to keep EVs in stock. Salesman Brian Aguilar said they’re out of Nissan’s popular all-electric Leaf, which gets 123 miles a gallon in the city and 99 per gallon on the highway.
“There just aren’t any available right now,” he said. “The only way customers can get them is by pre-contracting them, and that includes a $5,000 markup on the retail price. We don’t even know when the next available shipment will be.”
Demand for fuel efficiency
The average price for a gallon of regular, unleaded gas in Los Angeles County was $6.03 on Thursday, according to AAA. Orange County was close behind at $5.99, followed by Riverside County ($5.91) and San Bernardino County ($5.94).
Prices are considerably higher at many stations. On Thursday, several Union 76, Chevron, Shell and Mobil stations in L.A. County posted regular octane from $6.59 to $7.51 a gallon.
California gasoline prices are always higher than the rest of the nation, in part, because of fuel taxes, according to the American Petroleum Institute. As of Jan. 1, the combined state and federal motor fuel taxes and fees paid in California totaled 86.5 cents per gallon.
California motorists have grown especially frustrated in recent days as gas prices here have continued to rise while the average price for a gallon of gas in the U.S. has begun to decline.
Severin Borenstein, a UC Berkeley economist who studies fuel prices, ties the uptick to a disruption in the state’s gasoline supply chain.
“Even as the crude oil price is dropping, it appears that some problem has occurred in the refinery sector to make California-blend gasoline,” he said in an interview with the New York Times. “I don’t know what the problem is or how quickly it will be fixed, but that’s definitely why our prices are more out of line than usual with the rest of the country.”
Gov. Gavin Newsom is looking to provide some relief to motorists through a proposal that would give a direct payment of $400 per registered vehicle to every vehicle owner in the state, with a limit of two vehicles per person. The money would be disbursed in the form of $9 billion in tax refunds.
A small portion of sales
California has just 10% of the nation’s cars, but it accounts for more than 40% of all zero-emission vehicles in the nation, according to Veloz.org. Annual sales of plug-in electric vehicles in California have gone from just 7,000 in 2011 to more than a quarter of a million sold in 2021.
Jack Derparseghian, a sales representative with Toyota Pasadena, said hybrids at his dealership are also flying off the lot.
“With gas prices so high, people are buying them,” he said. “Anything that’s gas efficient is going fast — really fast.”