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Saturday, September 02, 2006

Hybrid Hubris

The Detroit News reports that in a J.D. Power survey, more than half of Americans say they would consider buying a gas-electric hybrid vehicle. However, the devil is in the details.

Yet U.S. car buyers may have unrealistic expectations about how much fuel -- and money -- they'll actually save by going green with one of many emerging, non-gas options.

Among those considering a hybrid, for instance, the belief is there will be a 28 mpg fuel economy improvement over a gas vehicle. In reality, the improvement is closer to 9 mpg, according to J.D. Power and Associates' 2006 Alternative Powertrain Study.

The survey also found that consumers expected to pay a $5250 premium for a hybrid vehicle.

So let's do some quick math. A 28mpg improvement means a savings of $965 a year, assuming 21mpg non hybrid economy, 12000 mi/yr, and $3/gal gas.*

You could interpret this to mean that people want a hybrid to payoff in about 5 years. This is reasonable, as the average car owner keeps a car for about 8 years.

But the truth is, only the stingiest of curent hybrids (Prius, Civic) come out ahead over 5 years, according to Consumer Reports, and to get there they had to assume $4 gas and federal tax breaks. (my post on this here).

Hybrids don't make economic sense, which is why they are more of a fashion statement at this point than a consumer movement.

* Non hybrid: 12000mi/21mpg * 3$/gal = $1714/yr;
hybrid: 12000mi/48mpg * 3$/gal = $750/yr

6 comments:

Anonymous said...

I don't know about not making economic sense...

Civic EX AT $19,855
Civic Hybrid CVT $22,745

That's $2890.

Hybrid: 50mpg/15k miles per year/$3 per gallon = $900 annual fuel expense

EX: 35 mpg/15k miles per year/$3 per gallon = $1285 annual fuel expense

That's $385/year. In five years, you have saved $1985 in gas alone.

Factor in independent research that shows ~%10 less maintenance, another $200 in your pocket. See honda.com

That's almost $2200, and we haven't touched the tax rebate incentive, higher resale value, saved time at the pump for the owner or lower GHG emissions, carpool lane/free parking offers, employer sponsored savings, saving the yourself money by not needing the federal government to secure more fuel sources with the military, fuel price hedge, and that oh-so-good feeling of 'I'm making a difference.'

And you know what, they're right! Props to the early adopters.

I know the measurable items above will put the owner well beyond the extra $700 necessary to make a hybrid GOOD economic decision. The intangibles are simply the frosting and colorful edible flowers on the cake.

The Auto Prophet said...

The problem is, the Civic Hybrid doesn't necessarily get 50mpg. If you check GreenHybrid.com, and sort by mileage (to see more significant samples), you see that they get between 36mpg and 50mpg, with the average around 45mpg.

If you only get 36mpg out of your Civic, it is a disaster, because you are hardly doing any better than the non-hybrid version!

Ari said...

I don't know, the idea of using less gas and givinmg less money to the likes of Venezuela, Iran, or Saudi Arabia makes it worth it to me. I already boycott Citgo (Chavez's oil company) but that doesn't seem enough for me.

BTW, my friends '06 Civic Hybrid gets 45mpg on average, a lot better than my V6 Stratus's 23mpg average.

Anonymous said...

Well, if you get 36 mpg out of your Civic, you're probably driving it wrong. A car is tool, much like a drill.

Regardless, 45mpg versus 35 mpg saves you $1995 in seven years, versus five.

If the average owner keeps the car eight years, they're still coming out ahead.

sh said...

Well, if you get 36 mpg out of your Civic, you're probably driving it wrong.

That's the typical "green" answer.

Drive any car like you've got an egg under the pedal and you can make significant improvements...

What A.P. is talking about is overall cost - continued ignorance of the rebates and incentives doesn't mean they aren't there. Without them the electrics, hybrids and ethanol sensationalism doesn't compute to anything more than a fashion statement.

Where ari says "less money to the likes of Venezuela, Iran, or Saudi Arabia makes it worth it to me" - factor in the total economic impact beyond the fad, take those incentives out of your own pocket, and it starts to suck in a hurry.

Paraphrasing Bob Dylan, somebody's got to pay.

Glenn said...

For me, the math was much more simple. I wanted a Hyundai XG350, because our Sonata was so good. Then I discovered the new 2004 Prius, did hundreds of hours of research (read everything possible, online and by buying magazines), ordered one and waited 9 1/2 months to take delivery.

So, in the real world, I'm obtaining 45-50 mpg for each tank full of fuel, versus 20-23 mpg that I would have obtained with the XG, in a car with an interior just as large. The prices of the cars were similar, but the insurance was less on the Prius, too. Plus, I got a few hundred off my taxes in 2005.

Thus, my savings is immediate and significant.

I "traded" leather and some electrical bells & whistles (and a car which vaguely resembled a Bentley if you were myopic and took off your glasses) for a futuristic car which (to me) looks cool and in which, I've had more people ask me on the street as I walk up to it about the Prius than any other car I've ever bought.

Plus, I'm not sending that extra money to "those-who-would-kill-us-all" (including "mr" Chavez).

As a small bonus, I've been able to get a 27" HDTV in the box, into the Prius (try THAT in a mid-sized sedan - not a chance) and also took a brand new Honda snow blower to my elderly parents in the Prius (once again - no way would I have gotten that into my Sonata or an XG sedan).

Finally, the emissions - the car puts out 11% of the emissions that a California spec car is permitted to emit. Far cleaner than a diesel car (which are so dirty that they cannot be sold in California emission states).

So, all in all, why NOT consider a hybrid?