Hybrids will not likely save buyers money, studies show

AOL Autos | June 13 2005 | Alex Law

[xp38]

Hybrid owners may be spending less for gas, two recent studies show, but they're almost certainly also paying thousands more to the car companies for the privilege.

Studies by the British Columbia Automobile Association (BCAA) and Edmunds.com in the U.S. make it clear that it's very hard for hybrid owners to recover the premiums car companies charge for their vehicles under the present economic conditions.

Essentially, hybrids don't save enough fuel at current gas prices to recover their extra cost, unless they're driven two-to-three times farther every year than the current average, but then that would increase the likelihood of service or maintenance work which would add more costs.

Of course, Hybrids would also make more financial sense at traditional annual driving distances if fuel prices went up to about $3 a liter.

It's impossible to state specific terms, however, since every hybrid carries a different premium and delivers different fuel economy levels, and sometimes there isn't a precise non-hybrid model to compare it with. Ford sells an Escape SUV with a traditional powertrain and one with a hybrid, for example, but there is no non-hybrid version of the Prius.

But on a case-by-case basis, both studies show over and over that there is no strong economic case for all hybrids in either Canada or the U.S.

The BCAA study did come up with a comparison that showed the Honda Accord Hybrid would be a lot less expensive ($3,305) over five years, but only if the hybrid delivered the promised fuel economy levels (which experience increasingly shows they do not), if they get reduced rate financing (available only in BC from VanCity), if they get a government grant, and if they don't cost any more to service. Big ifs, to put it mildly.

Edmunds.com did a similar review of the cost differences between hybrid and vehicles with traditional powerplants in the U. S. and reported that, "during the first five years of ownership, a hybrid can cost as much as US$5,283 more than its non-hybrid counterpart."

For its part, the Santa Monica-based organization could only come up with one example of a hybrid costing less over five years - a Toyota Camry LE would cost US$81 less than a Toyota Prius.

Phil Reed, a co-author of Edmunds.com's "Strategies for Smart Car Buyers," says possible hybrid buyers need to review the situation carefully. "While some people buy hybrid cars because they appreciate the environmental benefits and enjoy using advanced technology," Reed says, "consumers looking at hybrids solely to save money at the gas pump need to carefully research the cost of actually owning and operating a hybrid."

According to Reed, "most hybrids' high sales prices, insurance costs and related expenses will offset the savings" associated with lower fuel and maintenance costs, though that last item is pure conjecture.

Reed says Edmunds.com analysts do "predict this cost differential is likely to decrease as the technology matures and hybrids become more mainstream."

Currently, hybrids make up less than one percent of market share, so "the manufacturers have not yet been able to achieve economies of scale and are passing the higher costs along to their buyers."

Since current customer demand greatly exceeds supply, Reed says, "the vehicles are easily able to carry the premium transaction price. At some point in the near future, these dynamics are expected to change."

In reviewing both studies, it's easy to see that both agencies support the wholly estimable desire to find ways to reduce airborne pollution, as they give hybrids every break possible and soft-pedal the results. Notwithstanding that, it's also hard for anyone -- even the most vehement environmentalist -- to miss the reality that hybrids cost more to operate.

Of the two studies, the Edmunds.com effort probably carries more weight because the Santa Monica-based firm uses its highly-evolved and well-proven methodology of estimating real world costs.

[MadIvan]

If we all switched to diesel, I am fairly confident that a significant drop in oil consumption would be achieved, as would a drop in price. Until such time as Bio Diesel, or diesel generated from waste materials is a viable prospect (though it is a promising technology), this is likely the least economically dislocating option we have at the moment.

Regards, Ivan

[doodad]

The hybrid is nothing more than a "Look at me, I'm cool!" status symbol. It's meant to impress someone.

The only thing that impresses me is how slow those damn things go. The savings in gas are not getting stuck behind one. They can't do 40 uphill.

[Paladin2]

Not only do they get 46 to 52 mpg (depends on how much zooming you do), they don't use ANY gas. Driving is fun again.

[stands2reason]

I'd have a funeral for my old one too!

Tell me about it! You can buy another used car in decent condition for that kinda money.

[dirtboy]

Now I'm just going to have to accept that I'll probably never drive one.

I just bought a old Dodge Colt as a commuter car. Gets 37 mpg. Saves me a hundred bucks a month on gas.

Which I'll use to get the wife an SUV just to make sure I keep pi**ing off liberals.

[agooga]

Ecolibs serve a useful purpose: They invest in loser bleeding edge technology like this and support it through it's awkward infant stages.

There WILL come a time when SOME type of alternate fuel system is a complete necessity. Hopefully we will have some nicely developed tech to step in and fill this need precisely because these goofs are doing what they're doing.

They're all right in my book.

[Spktyr]

No argument on the stick and the the $30K, but a regular gas Accord loaded out is within $1000 of the hybrid, and the hybrid is notably faster (and only comes loaded), if you want an automatic Accord. Faster and less gas consumption = good.

[stands2reason]

I love the fact that those lib Prius owners will drink bottled water --- that has been shipped to them in big diesel - chuggin' semi's. :-)

[Kirkwood]

I totally agree they are not cost effective at this point, but I do think the technology is interesting and you have to start somewhere is you want to be less dependent on arab oil. I say, it's not for me, but if others want to buy into it, then by all means do so. Maybe 10 years from now it will be cost effective and then some.

[B Knotts]

Hybrids make little sense in the long run, plus the additional pollution they create from all those batteries is nothing to sneeze at.

Algae-produced biodiesel, in conjuction with the proven technology of the compression-ignition (diesel) engine, is over its entire cycle pretty CO2 neutral, and makes more sense than hauling around that extra battery weight, especially outside of urban centers.

[B Knotts]

FYI, it can also be produced from algae.

[NCLaw441]

I am no "ecoidiot" though. I just think the car is pretty cool, and I do get about 48 mpg overall. I spent about 23K for it, which is about what I was looking to spend anyway. My last car required premium gas and gave me about 25 mpg, so this car IS saving me money. You do have a point, though. I have to constantly remind people thatI am a conservative, despite my choice of car.

[B Knotts]

Right you are, Ivan. Plus, the more diesel engines we get out there, the more fuel flexibility we have.

And the diesel engines last longer, reducing pollution from manufacturing.

[Vn_survivor_67-68]

Hopefully we will have some nicely developed tech to step in and fill this need precisely because these goofs are doing what they're doing.

goofs.....excellent point......I believe the tech must ultimately be H in an IC engine or perhaps turbine.....but not for a VERRRRY long time.....elec and/or hybrid is nonsense (goofy)......the fleet and infrastructure for H is not even possible for a decade, and the tech details maybe a lot longer, generating the stuff and containers being only a part of the probs.

[stands2reason]

Cool, thanks for the link.

I gotta play it for my husband -- he's an Elvis impersonator (wayy better than that guy -- if you live in West Texas/Oklahoma or Eastern NM, FM me if you need an Elvis!).

I just hope he doesn't think of it when he's singing "In The Ghetto" in a gig as he shouldn't be grinning during that song. :-)

[Poser]

Just for giggles, let's assume the following:
1. Gas costs $3 per gallon.
2. A hybrid car actually gets 50 miles per gallon.
3. A non-hybrid compact car gets 35 miles per gallon.
4. The life of each car is 200,000 miles.
5. The hybrid costs $5,000 more than the non-hybrid.

Total gas cost for the hybrid:
200,000/50=4000 gallons x $3 = $12,000 fuel cost
Total gas cost for the non-hybrid:
200,000/35=5715 gallons x $3 = $17,143

So... You just barely break even at $3, 200,000 miles and $5,000 difference if you actually get 50 MPG. In real life, the hybrid only gets a few miles per gallon more than the non-hybrid and gas is only about $2 per gallon in the US. Additionally, the maintenance costs of a hybrid are MUCH higher over 200,000 miles and most people only keep their car for 100K miles or less.

It appears that it's going to be quite a while before the hybrid pays for itself. It's a trend to watch, however.

[pillbox_girl]

Of course the Bio part of BioDiesel needs more energy to produce than straight Diesel....Bio comes from grain, which needs energy (oil) to plant, fertilize, harvest, and transport.

Not a valid arguement. Tractors run on diesel. Harvesters run on diesel. Trucks run on diesel. They can all be run on the BioDiesel they help produce and transport. You neglected to mention the heat and mechanical energy put into the process of converting the vegetable oil into BioDiesel, but that can also come from BioDiesel. And while many synthetic fertilizers come from petroleum, they can also be produced from other sources.

The net energy balance of BioDiesel fuel made from oil seed crops is at least 3 to 1 depending on the seed crop (and higher for crops like the Oil Palm and much much higher for oil producing algae). In other words, every erg used in the production (transportation, refinement, etc.) of BioDiesel, results in 3 ergs of BioDiesel fuel. Better yet, the carbon balance for BioDiesel production is a negative number. More carbon is stripped from the air to make an gallong of BioDiesel than is released into the air when that BioDiesel is burned. And since, as I mentioned above, almost all the energy used to produce BioDiesel can be supplied by BioDiesel, it can be produced in an essentially closed loop. Sunlight and carbon come in, and BioDiesel goes out.

[B Knotts]

Eco-car.

0-60 in 5 sec.

30+ mpg combined.

Can run on biodiesel.

[eddie65]

I don't think economics is the reason people buy hybrid cars.

[tom h]

My Nissan Sentra, back in 1982, got 41 mpg city and 49 mpg highway. It was not an especially small car like the Yugo. That's better mileage, with a mere 1.6 l engine, than the hybrid Prius gets with its expensive technology.

I loved that Sentra. My best ever car when I was a young pup.