The High Price of Hybrids

BusinessWeek online ^ | 3/10/2006 | David Kiley

[reagan_fanatic]

*sigh*

Hybrid technology is still in its early stages. As time goes by and more and more vehicles are built and sold, the technology will improve to the point to where hybrids will be a smart purchase, both financially and ecologically. No technology ever starts out at its peak.

[DoughtyOne]

I'm not convinced the resale value is going to be as dismal as some have assumed. The hybrids are fairly flying out the door at dealerships. The cost of battery replacements aren't turning out to be that high either.

You may be right, but as hybrids spread out across some popular models, I'm not so sure the resale values are going to plumet.

I do think some of the umpopular styles may have had in impact on some of the early model's resale values.

[Righter-than-Rush]

I see no credence in the fears of global warming. The evidence simply isn't there. It's like a fear generator.

You're right about cow farts... can you believe the government spent untold MILLIONS of dollars on studies to measure the effects of cow gas? And how about the evolution nut who climed that dinosaurs went extinct due to their own flatulence (they couldn't take the heat)? I love the boneheads of athiesm and evolution... they are funny to watch.

[Doohickey]

After 5 years and 75000 miles, it will be time to change the batteries

Is that based on something you can provide a link for, or did you just make the whole thing up just now?

[discostu]

Most gas vehicles don't emit that much anymore, the majority of vehicular emissions come from poorly maintained vehicles that the owner is finding a way to avoid government regulations with. Thanks to improvements in both the engines and the exhaust system many newer all gas vehicles will actually emit cleaner air than they take in when run in many of the larger cities in America. So the hybrids contribution to clean air is questionable, they still burn gas, depending on the model and what you're comparing it to their gas savings isn't that great, and we've gotten much better as a whole about burning gas cleanly.

Buy whatever car you want, but if you're buying a car for a specific advertised reason you should take the time to make sure the ads are truthful. My "official" stance on the hybrids (not that anybody really cares, just putting it forth for clarity) is: wait and see. I'm in software QA and have the standard QA person's lack of trust for new technology, I want to see the performance of the 3rd production generation of these things, I never trust the 1st production generation of anything and rarely trust the 2nd. Hybrids are in production generation 1, so I'm waiting and seeing.

[antiRepublicrat]

I bout it because I was challenged when I drove it.

Challenged? Don't these things usually pretty much drive themselves (automatic, etc.) and have a econobox suspension setup? I can see getting one for the fascination and instrumentation aspect, but I can't see a challenge in driving one.

[IamConservative]

I still can't figure how a hybrid is better than a 4 cylinder turbo-charged diesel that gets 50-60 MPG. As diesel made from fossil fuel increases in costs, we will cross the economic viability threshold for biodiesel. This seems like a much greener solution that having millions of cars schlepping lead core batteries around.

[Publius6961]

All of their claims are valid to the mythical "reasonable person"; except one.

Their fuel tank/ fuel management system is horrible. Only in another reality can you go 600 miles between fillups.

And having 2 gallons still in the tank when it automatically shuts down is not only incompetent; it's inexcusable, in the 21st century.

[DoughtyOne]

Thank you.

[eraser2005]

Oh, I agree that the savings are not exactly impressive. Of course, what if you keep the car longer than 5 years? If you're replacing cars every 5 years or less, you obviously don't care a whit about the total cost of ownership. A well maintained car should last 12-15 without much trouble, and during the latter years depreciation costs you next to nothing.

For example, the first 5 years I had my Taurus, the costs looked bad, as depreciation on a Taurus is terrible its first 2 years. The next 5 years have been dirt cheap. Last year it depreciated just $300. It cost less than that to properly maintain.

So what are the savings after 10 years? Depreciation curves aren't linear, so I would suspect the payoff (ESPECIALLY for the Escape, which suffers more in depreciation its first years) would improve.

Of course, we truly don't know the maintenance costs. But since the batteries are lasting 180k miles without problem now, and the current cost of replacement is down to the price of a new transmission, is that a serious concern? I suspect we'll find out that the long term maintenance costs are on par - batteries will come down in price, but last longer than expected (tech is grand), and some of the cost will be made up through lower wear and tear on other components.

[Doohickey]

Stocks are an investment. Precious metals. Bonds. Even real estate. But new cars? Please.

[G.Mason]

"If you cannot meet ALL of the above, a hybrid is nothing more than a feel-good toy. Frankly, I feel better by just driving my SUV less by combining trips and by letting my fingers do the walking."

That sums up my feelings also.

I would imagine folks are getting to the point where they are seriously planning their driving excursions.

Shopping the internet, combining multiple chores and shopping trips, and avoiding many unnecessary trips around the town.

This will show up in the economy and there is no if's ands, or but's about it.

BTW ... Motorcycles are a non issue, for obvious reasons that younger people choose not to understand, the new technology autos are a very hard to sell to those over 35 that aren't members of the Green Party, and finally, Inasmuch as I live in a rather rural area I will have my full size pick up truck. ;)

[Doohickey]

I imagine this same type of fear kept people from buying phonographs. Those needles are made out of diamonds, you know. It's going to cost a bundle to replace that...

[discostu]

No their claims aren't valid. They claim much higher gas milage than reality, they claim overall saving for long term ownership which is only true on a couple of models and even then it's small. Those claims are false, whether a reasonable person is examining them or not.

[eraser2005]

I agree - All the hybrids are coming with LONG warranties. Current list price for a Prius battery is about $3k. Expected life has been proven to be over 180,000 miles. For most people, that's a good 12-15 years of use. I really don't think battery replacement is a serious concern at this point (other than defects which would be covered by warranty). At the rate the price is dropping, it might not even be that expensive after 10-12 years.

[Righter-than-Rush]

See post 16.

[Publius6961]

"Sure it is...just dont expect others to have to share the motive. Not saying you do but you knw as well as I do that there are people who think everyone should drive them. I think eveyone should drive what they want to drive...including you driving a hybrid if you want. more power to you." Thank you. I have never pushed hybrids on anyone, not ever even suggested that anyone else should drive one.
Some of the posts on this subject however, reveal a whole lot of neurotic and controlling people...

[RHINO369]

I personally wouldn't buy a hybrid now, I'd wait 10 years when the technology is refined, and the car will be an actual gas electic hybrid, where you can recharge the battery from an outside energy source. Electic hybrids are a great idea, especially for cars that are stop and go, but its only the first generation of these things.

Plus me studying electrical engineering, I wouldn't trust myself with a hybrid. I know I'd attempt to modify it to take a charge from an outside source, ruining my warranty, and possibly the whole car!

[RayChuang88]

One of the big issues up till now with hybrids is that the battery pack consumes a lot of interior space and contributes too much to the dead weight of the car. With the new fast-charging lithium-ion batteries now coming on the market, this will allow automakers to drastically reduce the size of the battery pack, with the advantages of 1) less intrusion into interior space and 2) less dead weight to move around.

The rumored hybrid version of the Honda Fit subcompact coming in April 2007 will likely use these new lightweight battery packs.

[Jeff F]

This morning NPR's story on Prius said that they earn a tax credit of something like $3,400. That is a lot change for the rest of us tax payers to have to fork over to help a bunch of people make fashion statements. This fat subsidy also goes mostly to Japanese car makers who are already creaming their US competition. Nice.