Skip to comments.Check me here / Conventional vs Hybrid
Posted on 03/18/2008 11:01:12 AM PDT by taxcontrol
I am now considering replacing my vehicle and I was doing an ROI/Break even analysis on a conventional power vs a hybrid to see if the additional cost was worth the effort. So I built the table below in Excel and have come to the conclusion that even with today's gas prices ... it simply is not a smart move.
My assumptions and math is below. If I'm wrong would someone point out my error?
|Miles per week||240||240||240||240||240||240||240||240|
|Cost delta for hybrid||5000||5000||5000||5000||5000||5000||5000||5000|
|Cost per gallon||3.25||3.5||3.75||4||4.25||4.5||4.75||5|
|MPG conventional [C]||20||20||20||20||20||20||20||20|
|MPG Hybrid [H]||30||30||30||30||30||30||30||30|
|Gallons per week [C]||12||12||12||12||12||12||12||12|
|Gallons per week [H]||8||8||8||8||8||8||8||8|
|Cost savings per week||$13||$14||$15||$16||$17||$18||$19||$20|
|Weeks to break even||384.6||357.1||333.3||312.5||294.1||277.8||263.2||250.0|
|Years to break even||7.4||6.9||6.4||6.0||5.7||5.3||5.1||4.8|
|5 year Fuel Cost [C]||$9,750||$10,500||$11,250||$12,000||$12,750||$13,500||$14,250||$15,000|
|5 year Fuel Cost [H}||$6,500||$7,000||$7,500||$8,000||$8,500||$9,000||$9,500||$10,000|
|5 year Fuel Savings||$3,250||$3,500||$3,750||$4,000||$4,250||$4,500||$4,750||$5,000|
|Savings vs Cost delta||-$1,750||-$1,500||-$1,250||-$1,000||-$750||-$500||-$250||$0|
Is the MPG for the hybrid the EPA estimate or actual? From what I understand the EPA estimates have usually overstated the hybrid mileage. Also, I am not sure what hybrid system Ford uses but for the Prius the main mileage gain is based on city driving with stop and go traffic because braking helps recharge the battery.
Yes, I know you’re considering the Ford Escape Hybrid (and not a Toyota Prius) but you may want to read the article I linked just for the heck of it.
Check into the life and cost to replace the battery. I’ve heard they die early and are very expensive (2K). If it’s true it’s probably worth factoring the cost into your analysis.
I got 43 mpg out of my Honda Fit last tank of gas, now keep in mind I nursed it seriously just to see what I could get. Coasting on hills, staying below 65mph, etc but it got it.
Thats 3 MPG more than I used to get out of my ‘87 Renault Alliance (freeway!). I miss that li’l car.
I usually get 35-39 regular driving.
The one item that nobody has been talking about is the replacement costs for batteriesbecause nobody is replacing them. That’s what I thought until I received an email from Ray Molton, who works in the real estate industry in Houston, Texas. Ray wrote, “My 2001 Toyota Prius lasted five years and 113,000 miles. And then the batteries seemed to die. My dealer estimated the replacement cost at $7,000. They recommended scrapping the car for parts.”
Ray told me that Toyota had been “no help whatsoever on this issue.” He called another dealer only to discover a larger estimate of $8,000 to $9,000. Even worse, Ray discovered that the Toyota shop had another 2001 Prius with a bad battery. Maybe there is a conspiracy brewing, after all. In a follow-up email, Ray wrote, “Toyota doesn’t want these battery issues to get out to the public. How could there be two 2001 Priuses in the same shop at the same time, if they have had no problems with the batteries?”
To make matters worse, Ray bought a salvage Prius battery to soften the damage to his pocketbookonly to discover that the salvage battery’s #13 cell was corroded, the same #13 cell that had a problem on his Prius.
All of this threw me for a loop. Apparently, it had the same effect on Toyota.
Ray continued to appeal to Toyota’s corporate offices, and finally got through to a customer care representative who promised to look at the Ray’s expenses. He persisted at the local level, and finally got Metroplex Toyota in Houston to clean the corrosive cell on the salvage battery and install itat half their normal pricein his Prius. The total bill, including rental car, salvage battery, service, and gasoline during the entire ordeal, was $1,345. Ray’s Prius runs like a top again.
2002 Honda Odyssey van. The auto transmission replacement cost out of warranty would have been $5,600. 1/4 the list price of the van itself.
Spreadsheet looks good with a couple of exceptions:
1. The higher MSRP is also likely to lead to a higher resale value. i.e. - you’ll recapture some of the premium when you sell the vehicle.
2. There is a tangible reduction in other maintenance and wear costs, such as brakes. The hybrids use “regenerative” braking whereby the braking power is actually the generator load recharging the battery, until you’re below about 5 mph, when the brake pads then contact the rotors.
I have a Lexus RX400h, and it came with an 8-year full warranty on the batteries, so I don’t care if they fail or corrode - I don’t plan on keeping it 8 full years and, until then, it’s their problem.
My expectation is that I’ll either break even on the premium, or come out somewhat ahead due to the resale premium.
How about the Renault LeCar? Only car I ever saw with only three lugnuts...
Look's like your numbers are probably pretty good.
What this table really tells me is that those who paid for the Prius (smug-factor) really got screwed. I know that includes some on FR who have flamed me in the past but, so be it.
In my opionion, the battery issue is a red herring. A 3-4 year payback for this technology is probably a good deal assuming you mostly drive short trips in the city.
You have to factor in the positive effect to cash which is immediate.
If failure occurs at 4 years, are you entitled to a replacement of a NEW battery system at ZERO cost to you, or:
1- a charge of 50% of replacement cost for a new system.
2- a replacement that is a "factory refurbished" system at ?? cost?
Option #1 could be expensive if the MSRP for a new system is $9,000.
Option #2 could be as satisfactory as them giving you the sleeves out of their vest.
The batteries take a LOT of resources to make,
and are toxic to dispose of.
Well, I never owned one...
the “War on Poverty”
as initially called the “War on Dependence”
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.