Do American Automakers Make the Right Cars for High Gas Prices?

Detroit put its eggs in the pickup-and-SUV basket. Now, showrooms are bare of fuel-efficient cars.


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Until the latest leap in gasoline prices, American drivers seemed largely unconcerned over the amount of money they were pumping into their gas tanks. In 2018, the average household spent just 3.3 percent of its gross household income to fuel vehicles, according to researchers at Argonne National Laboratory.

Previous fuel shocks, including the ‘70s energy crisis that drove a major economic downturn, seemed a hazy memory. Automakers, particularly the traditional Detroit brands, have assumed largely the same blasé attitude. In recent years, General Motors, Ford, and Chrysler’s parent, now called Stellantis, have eliminated small gas-sippers—perennial money-losers—from showroom lineups as demand withered.

Giving the public what it clamored for, domestic brands instead are churning out thirsty, feature-laden pickups and SUVs in growing varieties, racking up the profits. With few of the high-efficiency models that Asian brands sell here, GM, Ford, and Stellantis unsurprisingly scored the worst corporate fuel economy among 14 major automakers in 2021. The EPA estimates new vehicles sold by GM averaged 21.5 mpg, followed by Stellantis at 21.6 mpg and Ford at 22.7 mpg.

Mediocre Mileage, Meet High Gas Prices

The timing couldn’t be worse: U.S. gas prices hit record dollar levels in March (before adjusting for inflation), with regular unleaded topping $6 a gallon in parts of California. But consumers clamoring for hybrids and other fuel-efficient models searching for relief at the pump have few alternatives among the offerings of familiar Detroit makers. Affordable small sedans or hatchbacks like the Chevy Cruze or Ford’s Focus and Fiesta are out of production or no longer sold in the U.S. While Japanese brands have dropped some of their smallest fuel-sippers, such as the trusty Honda Fit and Toyota Yaris, they still sell economical Civics and Corollas here.

Attractive gas-electric hybrid models, which could bridge the gap to the EV era and soften the financial blow of bloated gas prices, are scarce at GM, Ford, and Stellantis dealerships. The automakers’ leading-edge electric vehicles either aren’t ready or can’t yet be built in large numbers because of battery and microchip shortages or supply chain snags. The result is a gaping hole in American-make showrooms, one that companies like Toyota, Honda, and Hyundai—which persevered with efficient cars and hybrids—appear happy to fill.

Hyundai executives have specifically cited the potential for higher gasoline prices as one reason they’ve kept the faith. “I can’t answer why some people would walk away from cars,” Brian Smith, then Hyundai Motor America’s chief operating officer, told The New York Times in 2019. “Because I don’t get it.”

American Automakers Are Short on Hybrids

Further clouding the picture for Detroit manufacturers is their relative indifference to hybrids, a huge disadvantage when interest in gas-electric models is jumping. Analysts with Lending Tree say consumer searches for hybrid cars jumped 257 percent from February to March 2022. EV searches rose by 300 percent. Even before the painful spike in unleaded prices, hybrid sales were booming, up 76 percent in 2021 to a record 802,000 vehicles, 5 percent of the light-vehicle market. Honda sold a record 107,000 hybrids, up 67 percent. That included a hefty jump for its Insight, a slick-driving hybrid sedan that delivers up to 55 mpg in city driving and starts from just $26,775. Toyota continued to dominate the field with a record 584,000 hybrid sales, up 67 percent, despite Prius sales being one-quarter of their levels in 2013. The company offers hybrid powertrains in four of its five bestselling models: the RAV4 compact SUV, the Camry mid-size sedan, the Highlander mid-size SUV, and the Corolla compact car.

Affordable EVs Are Coming, But Not Quickly

Sales of purely electric cars tallied 435,000 vehicles in 2021, barely half as many as hybrids. And Tesla was responsible for the vast majority of those; GM sold fewer than 25,000 Chevy Bolts, an electric hatchback that was waylaid by a battery-fire recall.

GM, Ford and Stellantis have all committed billions of dollars to EVs, jostling with Tesla for sales and Wall Street’s attention. Less-sexy hybrid technology has often languished. GM is aiming to produce only pure EVs by 2035. For now, however, these are mainly luxury-priced pickups and SUVs. The GMC Hummer EV is just arriving in showrooms, starting from an eye-opening $112,595 in Edition 1 trim. Ford’s Mustang Mach-e starts from $44,995, and its eagerly awaited F-150 Lightning pickup will start from about $55,000 in XLT form but rises to $92,000 in Platinum guise.

America’s Reluctance to Go Small

If current gas prices hold, the average household will pay $1,300 more for fuel in 2022 than it did in 2019, according to Moody’s. Yet analysts caution the current price crunch may be different from 2008, when Americans ditched guzzlers and flocked to smaller cars. Consumer effects are hard to predict, and nearly every popular car and truck model is in short supply, said Stephanie Brinley, principal analyst at IHS Markit, a financial data firm.

“The fact that we can’t build enough of anything people want is a big problem,” Brinley says. “It’s a higher pain point now, but it’s not likely to deeply change what consumers prefer to buy, and that’s pickups and SUVs.”

Luke Donahue, a senior manager with J.D. Power, a market research firm, also doesn’t expect a major shift from SUVs to cars or a radical downsizing movement, in part because SUVs have narrowed the gap in fuel economy with cars. But Donahue does anticipate some shift in demand, with consumers targeting the most fuel-efficient version of a vehicle they already want. The payback becomes apparent if fuel prices hold firm in the range of $4 to $4.50 a gallon, he said.

Even if the choices are limited for shoppers looking for an efficient Detroit model—aside from unremarkable small crossovers—loyalists will find some bright spots in the showrooms of Motown makers. The 2022 Ford Maverick is an all-new, overachieving small pickup offering a Hybrid model that delivers 42 mpg in the city (37 mpg combined) starting at $21,490. A Ford Escape Hybrid earns a 41-mpg combined EPA rating.

No matter which model checks all the boxes for a shopper, availability is going to be a challenge with the current inventory drought, and the predatory markups at some dealerships can cancel notions of affordability. Maybe it’s time to consider the outliers: A Jeep Wrangler 4xe plug-in hybrid can cover 21 miles on electricity alone, while snaring a $7,500 federal tax credit. Sure, those electric miles aside, the Wrangler’s fuel economy is nothing to write home about. But with 375 horsepower and heroic off-road ability, the Jeep is perfect for outrunning whatever disaster looms ahead.

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Lawrence Ulrich
Lawrence Ulrich is an award-winning auto writer and regular contributor for a variety of national newspapers, magazines, and web sites. He and his territorial cat are Brooklyn-based. Lawrence is also the proud owner of a fast-but-frustrating 1993 Mazda RX-7 twin-turbo R1.