At the beginning of 2014, when fuel prices seemed headed for new record highs, U.S. shoppers couldn’t drive off fast enough with small cars and alternative-power vehicles, such as the Toyota Prius and Nissan Leaf.
But with fuel costs down by at least $1 a gallon across the country, manufacturers have been struggling to sell those same, high-mileage vehicles. That’s forced them to stack up new incentives on the hood and, in some cases, slash production.
That poses a challenge for the industry as it faces new fuel economy mandates for 2016 – with even tougher targets phasing in from now until 2025. Even so, automakers show little sign of retreating from the aggressive plans they’ve put in place to introduce new battery-based vehicles and other clean alternatives.