Two year payback on hybrids?

I think the hybrid story needs to move to a cash flow proposal.

I was spending $12-15/day in gasoline with my Toyota SUV. Now I am spending $12/day for a lease, $0.14/day for an EV subscription, and less than $1/day for gasoline.

 

Is he saying that people are poor at math? That is true, but there is no need to change for math impaired.

Is he saying people do not drive much? No hybrid will pay itself back if you do not drive much. My gen 2 paid itself off in 3.3 years.

 

What's going on is that while people complain that gas is expensive. It's not. "Expensive" means that it costs enough that people care enough to change their behavior.

For example, I know some one who recently bought a late model used Mercedes. He is complaining about the cost of fuel to drive a 100 mile commute. I suggested he trade it for a new Prius C. Well, it seems the purpose of the car is more than transportation, He drives the Mercedes so that people will see him in an expensive car and thick is some rich successful guy.

It's funny that so many people think other people even care about what kind of car you drive. Hardly anyone knows or remembers what kind of car other people have.

And YES most people are just horrible with math, and that is for well defined homework type problems. When it comes to analysis of real world problems if you can compute the total cost to own a car or the payback time as a function of MPG you are a "one percenter".

 

No. It's fine. The 3% is about how the Prius drives. The absolute limits are financial, but fundamentally it's that people don't want to drive one. For the same reasons the CMax will add new hybrid sales but not too many. For the same reasons you can't look at the hybrid market to see how longer-range plug-ins will sell.

 

i don't think 3% of total vehicle sales is a good factor to judge by. there are too many different types of cars people drive for different reasons. it should be the percent of a certain mid size segment.

 

When you buy a hybrid you are paying $3000-$5000 more for the car than an equivalent non-hybrid. To add insult to injury, you owe more sales tax, and in VA, your annual property taxes will be higher every year for a more expensive car. Not only is the gov't not subsidizng hybrids, hybrid consumer is subsidizing everyone else. So I am sort of in agreement with the AutoNation CEO that the gov't policies are not necessarily favoring the high MPG cars.

 

When I purchased the 2012 Prius Two, I had the Mazda3 and the Prius in mind. I obtained the OTD price in October for both the Mazda3 and the Prius Two. For the purpose of this comparison, I drive 12,000 miles per year.

Costs:
2012 Mazda3 i Touring Hatchback (Skyactiv 6AT): $18,800 OTD
2012 Prius Two: $22,300 OTD
OTD Price Difference: $3,500

Fuel Economy:
Mazda3 i Touring Hatchback (Skyactiv 6AT) Fuel Economy: 32 MPG
Prius Two EPA Combined Fuel Economy: 50 MPG

Annual Fuel Costs for 12,000 miles Each Year @ $3.50/Gallon
Mazda3 Hatch: $1312.50
Prius Two: $840
Money Saved Per Year: $472.50

Years to Recoup Initiate Price Difference Through Gas Savings: 7.4 Years

My decision to purchase the Prius was based on its "Much Better Than Average" reliability rating. I decided against the Mazda3 hatchback due to its "Average" reliability rating from Consumer Reports.

The Prius has a 536 miles driving range for each full tank of gas, while the Mazda3 has 418 miles driving range for each full tank of gas.

At the same time, the Mazda3 hatchback is much better vehicle for driving enjoyment and fun, though it has a lower score from CR's testing and has a lower ownership satisfaction score.

In terms of annual insurance premiums, my insurance agent quoted a $20 difference between the Mazda3 and the Prius. In terms of features, both cars are very similar, with features such as Bluetooth, Smart Key, Alloy Wheels, etc.

The backseat of the Prius allows it to function as a midsize family car, but the Mazda3's backseat is certainly considered compact car dimensions.

At the end, the Prius Two's excellent reliability, lower maintenance costs, slightly lower insurance premiums, the more spacious backseat, and its longer driving range made it a better choice.

 

Lexus recently unveiled the new ES-300h. The base model price is only $2800 difference from the non hybrid ES. Not the usual $5000-6000 it is on some of the other models.

It appears cost is coming down and the manufacturer is sensitive to the differences in pricing. With the cost of fuel basically double in the last four years, hybrid sales and awareness should be zooming.

I am one of those consumers that typically drive the vehicle "until the wheels fall off."

 

Your Prius will be worth more most likely, at least 50% of the initial difference... so its down to 4 years... then less maintenance like brakes is needed. So that brings it down a bit more... plus you get larger sized car as well.

 

The Prius C was never considered due to its diminutive subcompact dimensions, overpriced OTD price at $20,300 for a Prius C Two, and abhorrently cheap-looking interior.

When I test drove the Mazda3, I noticed myself driving more aggressively and frequently driving over the speed limit due to the quicker throttle response, the analog speedometer, the suspension tuning favoring agile handling, and good steering response with a quick steering ratio. Unfortunately, road noise and wind noise are pronounced at speeds above 45 MPH.

The Prius is an efficient hybrid vehicle with the purpose of minimizing fuel-consumption for commutes from point A to point B. In Eco Mode, the throttle response is lethargic. Steering feel is absent, and the regenerative brakes are grabby. The lack of acceleration performance and the hybrid system indicator on the Prius encourage a conservative driving style to maximize fuel economy. The flaws of the Prius in handling and driving dynamics can be forgiven due to its 50 MPG fuel economy and practicality as a midsize family car.

The bottom line is that the Prius is an extremely efficient appliance with low operating costs. The "hybrid premium" can be recovered well within the lifetime of the vehicle. Most importantly, it competently and reliably performs its function as a practical solution to the my transportation needs.

If I have to start the purchase process again, I certainly would choose the Prius without hesitation, though I would seriously consider purchasing a used Gen III to help recoup the "hybrid premium" quicker.

 

First of all, the "payoff interval" is an incomplete measure of the financial value. The payback time fallacy disregards the residual value of the car, which should be included in the total equity calculation. If one uses a (technologically logical) linear depreciation over the entire useful life of the car, then one will already be ahead after the very first tank of gas.

Secondly, the last time I looked, the hybrid share within Toyota brand car sales (excluding LDTs and SUVs) in the US was around 20%. This might be indicative of where the hybrid share for the entire market could be if there were more models of other brands available with hybrid drive.

 

this is what i'm talking about. i think it looks pretty good.

 

consider also that prius and other hybrids are making manufacturers work harder to provide non hybrid vehicles with better mpg's to try to keep people from switching. if the average buyer see's someone touting 40 mpg's, they may only go there and purchase without even testing a hybrid.

 

LOL, that sums it up for me when I drive my other car (rarely) with V6 and tons of power. Thus, Prius saves me a lot of cash in speeding tickets.

When I was shopping for my new car in late 2010, I narrowed it down to 2011 Hyundai Sonata or 2010 Toyota Prius. I didn't even test drive Hyundai. Prius was actually cheaper and had better MPG. No payback period for me.

 

Just my opinions: The auto market is not homogeneous. Hybrids & EVs attract segments that have quantitative criteria. These people are basing their buying decision on better FE or lower emissions or less maintenance, for example.

Other segments don't have quantitative criteria. They may need a racing stripe, or a specific enamel color (General Lee Orange, anyone?), or it has to be sold by the closest dealer. They don't know or care what the EPA rating is until gas costs "too much" then don't care again when gas becomes "cheap enough". It may be the layout of the interior or the styling of the sheet metal or just that the gas tank is on the wrong side of the car.

Some are price conscious so the main criterion is OTD cost.

All manufacturers have the same problem. They have to figure out what buyers want two or three years in the future and are willing to pay for. What can you do to a platform to attract more buyers without alienating the existing base? Will the change attract more new buyers or drive repeat business away?

Technology changes as does the level of competition. 3 1/2 years ago the Model S prototype looked amazing. Now as the production cars are coming off the line a number of cars from other brands have some of that functionality. Ford's got an easier way to open the hatch. Touchscreens & connectivity are becoming commonplace.

The only way I see hybrids & EVs taking double digit share in some market segments is through government intervention or insurance industry policy. It's going to take fuel economy standards & restrictions on displacement or horsepower and/or insurance companies not writing policies.

 

Using Mike Jackson's logic - it's not worth it to switch to a new car for fuel efficiency if one only considers current and past fuel prices and if one is satisfied with one's own current vehicle's performance and functions - it's also not worth it to switch given the high cost of new vehicles. A well maintained used vehicles often has a higher ROI than new vehicle. So if one followed Jackson's neo-classical economics Adam Smith logic of a completely rational consumer (rationalism) who bases their vehicle purchase on ROI then used vehicles should be preferred over new cars. Ah but we know this is not how consumers actually behave don't we? The Flaw in Jackson's logic is that all ROI decisions are framed under certain assumptions that may or maynot hold true for the actual consumer out there who is doing the buying in the real world. For example, the results of a ROI matrix changes when the length of ownership is extended over 4, 6, 8, 10, 15, or 20 years. When one keeps a vehicle over 15 years -reliability and fuel efficiency have a bigger impact than residual/resell market value. In addition, a car buyer may be motivated by the perceived risk that future fuel prices will go much higher - but Jackson diplomatically dissuades the possibility that future fuel cost will rise - atleast in the immediate future. Yeah, right - I've heard that before 20 years ago when regular gasoline was about $1.10 per gallon.

In the USA, many Americans are overweight - food is relatively cheap - especially the kind of food that makes us overweight. In many developing countries, many people are skinny and underweight because food is relatively expensive wrt to earnings. They are skinny and underweight because calories are expensive. As long as energy is relatively cheap, most Americans will gravitate to FSPs - because they can.

However, whether a person considers something expensive or inexpensive will depend on that person's own circumstances - Paris Hilton and that homeless woman with two kids in tow at the soup kitchen are going to have divergent assessments.

 

You are getting there with the paragraphs, but still have a little ways to go! Again love your expertise and insights! Just sit back and take a look at the your response as a whole, doesn't it look (read) better with some more paragraphs?

BTW - I am not an English teacher or in any way professionally involved with writing per se. I am actually an engineer by education/trade.