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Friday, May 08, 2009

Republicans and Hybrids

Over at the WSJ, the question is asked, "Where are the Republican hybrid buyers?".

The answer, is that most people (not just Republicans) won't buy a hybrid until the economics work out, and until the cars available will be a minimal sacrifice in handling, room, and performance.

For example, the closest to a no-compromises mid-size hybrid that I have seen to date from a Detroit automaker is a Ford Fusion hybrid. But it costs around $30,000! An I4 Fusion can be bought for much closer to $20,000.

The author makes the argument that some conservatives will be attracted to the national security aspects of hybrids. I agree with this personally, and if hybrids become affordable, I would consider one even at a modest premium to a gasoline vehicle.

Without a clear cost advantage, hybrid sales have to rely primarily on the segment willing to pay more for green -- a segment that has been hard-hit by the financial crisis yet still seems to be growing. But if we really want to expand the number of buyers, we should develop new arguments that appeal to the Republicans who have been holding back. To look at it another way, every hybrid car reduces not just greenhouse gases but reduces our dependence on foreign oil -- especially the new plug-in hybrids under development. And that means that buying a hybrid is not just good for the environment, but good for our energy independence and national security.

Obama is doing his part to promote hybrids in many ways. One way that isn't as frequently mentioned is that his administration is not as friendly to oil drilling as Bush's was. Obama's policy will restrict the supply of new oil, which will drive the price up (and, of course profits to OPEC). This will cause people to consider hybrids, as gas goes back to $3/gal over the long term.

Even Republicans understand $3 gas.


Anonymous said...

Jay Leno says Volt superior to Prius.

Take that! Reynolds. :)

Anonymous said...

Well, first, the restrictions on new oil drilling won't have any effect on oil prices for at least the length of Obama's (first) term. The lead time to develop an off shore oil field is measured in several years, and there are already numerous unused oil leases on BLM land today, so additional leases aren't likely to increase production. Furthermore, once developed the off shore fields would only make a dent in total production. In short, for the money there is a better opportunity in the short term to cut oil usage through conservation and shifting to alternatives.

Second, you are correct about the hybrids and costs. For most people you're simply not going to make up the additional cost of the hybrid during the life of the car from gas savings, even if gas goes to $4/gallon.

The exceptions occur when you factor in tax credits. The federal credit is pretty nice when it is 100%, but it's already expired for Toyota and is being phased out (50%) for Ford. If you can get a 100% credit (for example, with the Altima that, like Ford, is built with the Toyota hybrid system) your payback period is much shorter -- as little as one year.

Furthermore, if you are lucky enough to live in Colorado you also get a state hybrid tax credit worth 85% of the difference between the hybrid and the non-hybrid. Add that to the federal credit and, depending on the model, it can actually be $1000 or more *cheaper* to buy the hybrid.

Which may explain why there are a number of Prii running around Colorado with conservative bumper stickers.