Hybrid Cars. Are we missing the point?

I will soon be in the market of a new car. I'm looking at fuel efficient cars primarily because of high gas prices and secondarily because of the carbon emissions problem. I focused my research on hybrid. I stuck with the mainstream brands because I do not want to purchase an experimental car or a car from a startup company that might not be around in a few years. Here is the list of the hybrid models that I considered:

1. Toyota Prius
2. Toyota Camry Hybrid
3. Nissan Altima Hybrid
4. Honda Civic Hybrid
   
5. Honda Accord Hybrid
6. Saturn Aura Green Line
7. Lexus GS 450h
8. Lexus LS 600h

Overall, hybrid cars seems like the step in the right direction, but I feel we are missing the point. Let's go in detail why I feel this way. I used 2 criteria:

• fuel efficiency (The higher MPG the better)
  
• cost effectiveness (Does it make financial sense to purchase the hybrid or the non-hybrid version?)

Fuel efficiency

The leaders of the pack - Toyota Prius and Honda Civic

The Toyota Prius gets 48/45 mpg compared with (in my opinion) the closest equivalent - the Toyota Corolla S gets 26/35 mpg.

The Honda Civic Hybrid gets 40/45 mpg compared with the non-hybrid equivalent - the Honda Civic LX gets 25/36 mpg.

The Toyota Prius and Honda Civic Hybrid are the standouts. They get at least 40 mpg in the city or highway. The con is they are considered compact cars, smaller than what I'm used to - my golf clubs might not fit in the trunk. I'll live.

The middle of the pack - Toyota Camry, Nissan Altima, and Honda Accord

The Toyota Camry Hybrid gets 33/34 mpg compared to the non-hybrid equivalent - The Toyota Camry LE gets 21/31 mpg.

The Nissan Altima Hybrid gets 35/33 mpg compared to the non-hybrid equivalent - the Nissan Altima S gets 23/31 mpg.

The Honda Accord Hybrid gets 30/37 mpg compared to the non-hybrid equivalent - the Honda Accord LX gets 21/31 mpg.

I'm not impressed; the hybrid version gives a measly 10/4 mpg extra. Nevertheless, there is an improvement. I would like to keep these cars on the list because I would likely purchase one of them if I did not consider energy efficiency because they are the most cost effective cars on the market.

These are hybrids? - Satura Aura Green Line and all the Lexus models

The Saturn Aura Green Line gets 28/30 mpg compared to the non-hybrid equivalent - the Saturn Aura XE-I4 gets 22/30 mpg.

The Lexus GS 450h gets 25/28 mpg compared to the non-hybrid equivalent - the Lexus GS 450 gets 18/25 mpg.

The Lexus LS 600h gets 20/22 mpg compared to the non-hybrid equivalent - the Lexus LS 600 gets 16/24 mpg.

I'm confused. Why are there hybrid versions of these cars? The folks who design these cars seem to have forgotten the purpose of using hybrid technology - fuel efficiency. My minimum requirement is 30/30 mpg. If you can get that you're off the list.

Conclusion based on fuel efficiency

The Saturn and Lexus models are definitely off my list of a possible purchase, but the rest are still in the running for the next criterion; cost effectiveness.

Cost effectiveness

I will do a quick comparison of the cost of ownership of the hybrid versus the non-hybrid model for each of the cars in the list. My definition of the cost of ownership is this:

total cost = (price tag - tax credit) + (miles driven * cost of gas per gallon) / [( city mpg + highway mpg)/2]

because I've made the following assumptions:

1. I do 50% city and 50% highway driving
2. Gas price is constant at $3.30 per gallon
3. I can get the maximum tax credit from the government
4. The tax credit numbers is from hybridCars.com website
   
5. All other expenses such as taxes, licensing, maintenance, etc are essentially the same

so the only variable in this equation is the "miles driven". I will keep incrementing the "mile driven" of both the hybrid and non-hybrid car to determine where the break-even point is. Click here to see a spreadsheet of a sample calculation.


Toyota Prius

Prius - price tag = $21,000 : tax credit=$0 : city/highway mpg = 48/45
Corolla S - price tag = $15,500 : tax credit = $0 : city/highway mpg = 26/35

Plug in those values into my total cost equation and you will find the Prius becomes cheaper than the Corolla after spending about $10,700 on gas at 150,000 miles.

Will it make it to 150K miles with the new hybrid technology? It is difficult to go with the hybrid with these numbers. Pass on the Prius. I'm going with the Corolla (The federal government used to give a tax credit of $3160 which will make the Prius cheaper after spending about $4600 on gas at 65,000 miles - much more palatable numbers).

Toyota Camry

Hybrid - price tag = $25,200: tax credit=0 : city/highway mpg = 33/34
Non-hybrid (LE) - price tag = $19,000 : tax credit = $0 : city/highway mpg = 21/31

Plug in those values into my total cost equation and you will find the hybrid Camry is still more expensive than a non-hybrid Camry after spending about $30,000 on gas at 300,000 miles.

It never gets cheaper! The lack of a tax credit makes it hard. Pass on the hybrid. I'm buying the good-old trustworthy Camry LE.

Nissan Altima

Hybrid - price tag = $25,100 : tax credit = $0 : city/highway mpg = 35/33
Non-Hybrid (S) - price tag = $20,100 : tax credit = $0 : city/highway mpg = 23/31 mpg

Plug in those values into my total cost equation and you will find the hybrid Altima becomes cheaper than a non-hybrid Altima after spending about $19,400 on gas at 200,000 miles

200,000 miles! Are you kidding me? The lack of a tax credit makes it hard. Pass on the hybrid. I'm buying the Altima S.

Honda Civic

Hybrid - price tag = $23,000 : tax credit = $2100 : city/highway mpg = 40/45 mpg Non-Hybrid (LX) - price tag = $18000 : tax credit = $0 : city/highway mpg = 25/36 mpg

Plug in those values into my total cost equation and you will find the hybrid Civic becomes cheaper than a non-hybrid Civic after spending about $7400 on gas at 95,000 miles.

This one is borderline. The hybrid mpg is decent. I think this one separates the real tree huggers from the wannabes. If you do go for the Civic Hybrid, better be in it for the long haul. I'm leaning towards passing, but this is the only one that comes close to making any financial sense.

Honda Accord

Hybrid - price tag = $31,100 : tax credit = $1300 : city/highway mpg = 30/37 mpg
Non-Hybrid - price tag = $20,400 : tax credit = $0 : city/highway mpg = 21/31 mpg

Plug in those values into my total cost equation and you will find the hybrid Accord is still more expensive than a non-hybrid Accord after spending about $30,000 on gas at 300,000 miles.

It never gets cheaper! Pass on the hybrid. I'm buying the normal Accord

Conclusion based on cost effectiveness

It is not very cost effectiveness to buy hybrids at this stage in the game. The only one that is worth considering is the Honda Civic Hybrid, but even that is a long shot in my book. There are other options like the Toyota Yaris or Honda FIT that have decent fuel efficiency and do not use hybrid technology that maybe worth looking into.

Overall conclusion

I must say that I am disappointed with my findings. I will admit that I have made a lot of simplifications in my analysis. Hopefully the errors lie somewhere in the these simplifications and someone will prove them to be flawed.

With the current choices of hybrid, you need to value the environment more than your bottom line. I want to buy a fuel efficient vehicle for "the greater cause", but I cannot afford to do it. I believe the majority of people have the same sentiment so we need to get off the guilt bandwagon thinking we need to pay more for energy efficient products. We need to focus on getting businesses to build energy efficient products that are so good that consumers want to buy it but because it is a superior product and not because it is a green product. The problem today is most energy efficient products either costs more or it is an inferior alternative. Hopefully, as more true fuel efficient cars hits the market their prices will come down and be comparable to the normal models and posers like the Saturn Aura Green Line and Lexus GS 600h will go the way of the dodo bird.