Tuesday, July 17, 2007

Why More People Don't Buy Hybrids

Forbes.com has a very good article about how and why many hybrid automobiles have not become big sellers. Many people buy the Prius because they have a personal desire to reduce their energy use, and perhaps because they would like to make a social statement about environmental protection. However, hybrid technology comes at quite a cost. For many consumers, a hybrid's price premium proves far too substantial; affordability becomes a major concern. Let's do the math. According to the EPA, a Prius averages 46 miles per gallon. A Toyota Corolla averages 29 miles per gallon. Suppose that the typical person drives 12,000 miles per year, with gas at $3 per gallon. The Prius owner saves $459 per year in gasoline expenses over the course of one year. However, the sticker price for a Prius exceeds that of a Corolla by approximately $7,000. In other words, it would take roughly 15 years for the Prius owner to recoup his or her extra investment ($7000 divided by $459 per year), and that doesn't even take into account the present value of money. In conclusion, I think hybrid technology is very promising, with great potential to help us reduce gasoline consumption and carbon emissions. However, the automakers have quite a way to go before they can make hybrid technology affordable for many consumers.

2 comments:

jvenu said...

In addition the future maintenance costs of a hybrid must also be taken into account. Essentially the Hybrid is a gas engine plus an electric engine and a battery, and some fancy electronics. As the car ages, the more the parts, the greater the probability things can go wrong, requiring expensive repairs.

The issue with being "green" is this... it only works if everyone wants to be green, or if there is some sort of governmental mandate in the form of reduced emissions beyond present standards. If I buy a hybrid the same day as my neighbor buys a mega monster SUV, the environment is not better off in any way.

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