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The Math Behind the Hybrid Hype
markmcb writes "OmniNerd has posted a thorough mathematical analysis of purchasing a hybrid vehicle that dispels much of the hype associated with this modern buzz word. The author considers all of the major factors to show just how much money a hybrid vehicle will or won't save you. In the end, it seems the only real winner after a hybrid purchase is the environment."
> the only real winner after a hybrid purchase is the environment.
That is to say, everyone and everything on the planet.
"In the end, it seems the only real winner after a hybrid purchase is the environment"
And that isn't enough?
My Sig: SEGV
umm...
buying a new car is almost -always- a losing proposition, financially. If money is a concern, a 3-year-old Accord or
Camry is probably the best way to go.
He compares the Prius to a Corolla; really it's closer in quality and size to a Camry, which is much closer in price.
Also, the value retention part of it is key in treating it as an investment, but "OmniNerd" doesn't do that, he's just calculating the change in monthly payments. That completely invalidates the monetary comparison from the start.
I.e. the "Math" here is off base, by quite a lot.
Plus, my '05 Prius is very fun to drive, wouldn't trade it for just about anything (well, maybe one of those $40,000 sports cars...)
Energy: time to change the picture.
It is the whole model that is screwed-up.
Getting rid of the cars is the only solution. There is no way on earth (or in hell) to provide three tons of scrap (and the energy needed to move them) to each human on the planet.
Fortunately in Europe we also have a system of public transport which most environment minded people (like myself) prefer to use rather than pretend we are doing our bit through the purchase of a new car.
You do realize that the situation in Europe would be identical to that of the US if gasoline/petrol was priced similarly, right? I know several Europeans who came to the US with this attitude only to eventually find themselves purchasing a gas-guzzling SUV.
Don't get me wrong - I don't believe that either side has it right. The US is correct in that everything should be done in order to lower the cost of energy. Europe has it correct in that moderation should also play a role. IMHO, the best middle ground is to place only a small tax on nonrenewables and use that to develop sustainable energy resources/infrastructure.
Unfortunately, it is probably a bit too late for that. There's just too much money in it for money-grubbing politicians.
More
Nice analysis, but like most of these type of analyses, they ignore some important factors:
Environmental cost of manufacturing NiMH batteries
$ Cost of replacing batteries at end of useful life (which is likely before the vehicle's useful life is over)
Environmental cost of disposal of NiMH batteries (likely 2 sets per vehicle during useful life, 100 pounds+ each set) That's a lot of heavy metals to dispose of.
Meanwhile, you can pretend your car holds 200 passengers.
I'm always fascinated by the capacity of the US citizen to asked to be taxed further.
Dark Reflection
Nobody is saying that mass transit systems dont burn fossil fuels, but they burn far less on a per person, per mile basis than private transportation.
Frankly, your comment just makes you look like a fool.
The article seems to be assuming that Gas prices remain constant through the life of a car. Anyone believe that? How about the same calculations assuming a 10% per year increase in gas prices (which they were this year before Katrina).
Fundamentally, there is a problem with the way the US is underpricing fuel.
Please define "underpricing" for me. With the oil companies making record profits it seems there is plenty of room for the price to go down. That strikes me as "overpricing".
Or are you thinking along the lines of a nanny state where the children aren't doing what the gov't thinks they should so is going to raise taxes through the roof as an "incentive for proper behavior"?
-Charles
Learning HOW to think is more important than learning WHAT to think.
I think I disagree with your premise that the US energy model is 'fundamentally flawed'. Surely, it makes sense that cheap energy will stimulate economic growth and add to the wealth of the nation. To this end, it is justifiable to have affordable gas. Venezuela is using this idea right now, last time I checked they were retailing gas for 4 cents/L.
With respect to this line of reasoning, the big white elephant in the room is the environmental costs. What is the point of enriching a nation if it become toxic in 50 years? What need to be happen is for the global economy, not just the US, to come to some concensus on the future of energy availability. More and more signs point to peak oil occuring now or in the next 5 years. That means from now on (or not far from now) energy will be a premium commodity and the costs associated will inflate. Inventing efficient gasoline cars is a useful tactic to stem the tide of oil scarcity, but oil is still dirty. Technology like fuel cells and hydrogen power must be the focus. Preserving the oil economy is folly.
Many people realise this and have argued that the global oil economy is a disastrous thing. I, for one, have no confidence that it will change, however. We are addicted to oil. Everyone in the developed world is addicted to oil. We are not going to stop. It is like an alcoholic who drinks himself to death. He knows he is killing himself but he keeps drinking. That is us. We will use oil until the world is toxic or the economy collapses plunging us into chaos. I'll be dead by the time it happens but unless there a radical shifts in the next ten years I think we are doomed.
So, to single out the US oil stategy is unfair. We all suck.
Have a nice day.
Just a couple of simple points:
1. I currently pay $2/gal and $1 of that is tax
2. The US is over twice the size of Europe so that does present some barriers to public transportation.
3. Actually, I agree with you in principle, just wanted to make the above points.
Those who open their minds too far often let their brains fall out.
I think you misunderstood -- the crux of his comment was simply stating that we cannot just go out and buy mass transit. It was in response to the aggressive statement that we in the US buy a new car instead of going out and, somehow, buying ourselves mass transit.
I think...didn't I just say...why yes I did: What we lack are effective battery systems.
"Fundamentally, there is a problem with the way the US is underpricing fuel."
How is that problem "fundamental". And I'd wager that "Fundamentally" there is a problem with the way Europe is overpricing fuel. "Fundamentally" The problem is that you think the government should have a say in how much fuel costs, when "Fundamentally" the price of fuel is the same everywhere, the only difference is other governments are making a lot more in revenue off of it than America is...
"Until the US starts to tax gasoline products in order to encourage fuel efficiency, then the US will continue to drive around in inefficient gas guzzlers"
We need more tax on gasoline? I'm sorry to tell you this, but in America almost half the price of gasoline has tax built in. Thats huge. Which begs the question, how much is your goverment maing on it? Why doesn't this piss you off? You're getting gouged at the pump by your own governing body, with the perception that they're furthering some economic cause.
gmuller
the author considers all of the major factors to show just how much money a hybrid vehicle will or won't save you. In the end, it seems the only real winner after a hybrid purchase is the environment."
as opposed to getting an SUV and having the only real winner be the car manufacture?
Look at how much toxic chemicals is in a battery. Now factor in that you have to replace the batt every 2-4 years. Not only does it end up costing you more, but you're not doing much besides thinking you're helping.
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I think you misunderstood. The attack was not at the lack of public transport (I have been in many cities in the US and there is adequate public transport for me to never find the need to get taxis etc). It was an attack at the culture of fixing any situation with the purchase of material possessions rather than changing ones behaviour.
Wife is angry => Buy her some diamonds
Children are screaming => Buy them McDonalds
The environment is collapsing => Buy a car
Mouse powered Chips, Open source Processors and Lego
So you want the US Government to take more of my money, because... why? Because your country's government takes more of yours? That'd make ya feel better, would it?
Oh, wait, I get it, you think somehow if gasoline were taxed more here the benevolent philosopher-geniuses in our Congress would take that money and reallocate every penny back into some kind of pro-enviro, alternative energy initiatives, Your're raving.
If the government taxes me more, it taxes me more, and that's our only guarantee. There is no illusion amongst anyone who has been around the track here at least once that the additional taxes will be used for The Good of Mankind.
Something else to consider. The US is a B-I-G country. People Drive here, with a capital 'D.' The distance I go some days to visit a single client would have me crossing international borders were I in Europe. And when I drive, I spend, and my spending is taxed, in various states. Gas gets too expensive, I travel less, I spend less, and I spend a lot less out of state. So higher federal gas taxes lead indirectly to decreased state sales tax revenues. Sure, I'm oversimplifying a bit, but you see that it's all a bit more complex than it may seem from 'Over There.'
Plus, we have *actual* roads here in the US, built for six lanes of modern traffic, not those single-lane chariot paths that are passed off as roads in Europe (and Boston, for that matter...). Man, if I lived in The Netherlands or Belgium, I'd be driving a motorbike, nevermind a Prius...
You do realize that the situation in Europe would be identical to that of the US if gasoline/petrol was priced similarly, right?
I don't see how that follows at all. Is your argument that people use public transport because of the cost? In my experience (UK) it's usually cheaper to drive, especially if the car has more than one person in it. I take the bus to work each day, and that's much more expensive than the car.
So why don't I drive to work? Well being sat in a traffic jam isn't my idea of fun. Given the choice I'll take sitting down with the paper. Most European cities weren't designed for cars (especially at current volumes), so maybe that's why we use public transport more.
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Not much to do with oil prices; more to do with infrastructure. I can't imagine getting by in the US without a car, unless I was based entirely in one of the larger cities, say New York. Otherwise, how are you to get to the mall to buy food and clothing?
Hey it's me almost... I drive a BMW 325Ci, it drinks fuel 29.5mpg is normal. However I bought this car from new and now it's paid for. I currently use about £200/month keeping it in fuel. If I were to go and buy a new car to replace this car, I would want to reduce my fuel consumption. However I would have to start paying for a car again, lets just say that I bought a car that did 60mpg (not likely, especially in the UK where we sit in traffic more than move), anyway I am now saving £100/month and the environment is better. But for me to be financially unaffected I would need to have a car that the repayments were only £100/month, so my current trade in vaule is about £11000, if I use this as a start deposit I can go for something about £14600 - assuming 0% interest on my loan. Then I need to think about the deppreciation of the new car v's old car, clearly I would lose more on the new car but how much? Anyway as the prius does about 60mpg at best, the problem is that the base price of this car is just under £18000, without depreciation I am worse off buying a new car due to the tradin, old/new fuel costs and new car costs. Also, my current car has already been built. I only have the environmental impact of the car now to worry about, a new car leaves the current cars impact still there plus the new car. To the the concept of buying a new car to save on fuel just doesn't work even with the UKs high fuel prices. Even the argument that the new car is more reliable is just stuipd, I recently had a LandRover salesman trying to tell me that it would be so much better to buy a new Discovery (about £800/month) as the reliability aspect would save me cash - I guess it might if I had to pay about £8k a year fixing my car, last year I spent about £500 on maintenance!
Yup, and it's also worth mentioning that some of us can't even make use of hybrid technology (regardless of the initial and ongoing costs) until the vehicles can actually do what other vehicles can do. Yes, one of my family vehicles is a full-sized SUV with a big engine. On a drive this weekend, I hauled about 900 pounds worth of people, 275 pounds worth of dogs, and about 350 pounds worth of gear, and drove about 450 miles (several of which were over some poor rocky, muddy roads, and part of which was in some slick mud). Yes, that trip cost about 60 bucks in gas... but back when I had a smaller SUV (as my other passengers currently own), we'd have required at least two vehicles in a caravan to do the same trip. An while I get around 17-18mpg because of the big V8, two (or more) smaller vehicles making the same trip would have used much more fuel per person.
So, I'm unusual, perhaps, in that I actually use an SUV for what it's intended to do. Most of the rest of the time, I'm working from home, and don't drive anywhere. A five-day-a-week communte in that vehicle would, of course, be crazy (unless I had a big carpool going - which is totally unworkable for most techie-types that I know, given the odd hours).
Don't disappoint your bird dog. Go to the range.
In the end, it seems the only real winner after a hybrid purchase is the environment.
All of us depend on "the environment" for our existence. So if the environment is a winner, then we're all winners.
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Based on what you've said, no, you're not in a position to purchase a new vehicle and therefore it won't pay for itself. Were you in a position to make a new vehicle purchase (age, damage, wear+tear, excess maintainance, etc.) then you should find the type of vehicle you're interested in and compare the regular version against the hybrid variant. Figure the difference in price, the total time you expect to own the vehicle, and the fuel savings per year (which in many cases can be upwards of 50%). Based on fuel savings, you can extrapolate how long it will take to account for the difference in price before the hybrid starts effectively paying for itself.
Remember that you can spend an eternity trying to find a way to make a car pay for itself but unless you drive a taxi/limo, you're attempting a lost cause. Cars are by far the worst investment you can make but they're a neccesary part of life, so it's a cost of living. Anything else will just give you a headache. :P
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Shameless plug. Like you weren't expecting it.
I've had a 2004 Prius since November 2003. I'm very pleased with my car, and I'll keep it for many years to come, I think. One thing that keeps coming up is that I didn't save any money. What I don't understand is why that focus is applied to the hybrid and not other cars? You can pretty much get a fully functional, well engineered car today for around $12K. So every dollar you spend over that is just for personal taste. When someone buys a $60K BMW, I don't hear people saying "You know, you didn't save any money".
I guess the idea that you might save money with a hybrid casts the image that most people who buy them are out to save money. I'm not. At $24K, the Prius is only a bit more expensive than other cars of it's quality -- but like a BMW purchaser, I would have bought it for even more. BecasuseI think it's cool. I like the idea of using as little oil as I can while still living a convenient and comfortable life. I like the idea of polluting as less. And most of all, I like the idea of voting (with my dollars) for changing technology in automobiles.
So, just want to point out that not everyone who buys a Prius is doing it for a financial reason -- probably not more than with any other car.
Cheers.
However, the arguement is that Europe "taxes the bejesus" out of their gasoline in order to encourage mass transit and energy saving vehicles.
In the U.S., while in principle this would be a good idea, there just isn't the urbanization that there is in Europe. European cities aren't built for car commuting - hell most of them had to be upgraded for horses 1400 years ago. Narrow, winding streets, and cobblestones, do not encourage cars. In the U.S., everything is younger, and most of it is built to accomidate cars, with wider streets, etc. As a result, the U.S. has always had that huge suburban and rural population that drives into work. In many places, there just isn't a mass transit option. I lived in metropolitan Memphis for a long time; there's no mass transit to speak of there, other than an aweful bus system. It's too close to the mississippi and too close to the water table for a subway (no one has a basement in Memphis). But, you know what they do have? A "beltway" (I-240) and a LOT of parking.
It's only feasable to use mass transit for everything if you live in one of the cities like Washington, DC, which has an excellent metro system and inbound rail system, or New York, who's subway system, while not pretty, can get you anywhere you need to go.
Driving places is a culture in America. Very few of us live close enough to walk, or even bike, to work. A friend of mine told me about an exchange student from Estonia whom he befriended, and how when they went to D.C. one day, and Dimitri saw the "Springfield Interchange" (the Mixing Bowl), it flipped him out. A road that's seven lanes wide in each direction, with flyover ramps going everywhere, people merging at 60 miles an hour 10 feet apart... it was like nothing he'd ever seen before.
Raising taxes on gas to $6-$8/gal in the U.S. would crush the economy. We're just not built for it. We're slowly emphasizing mass transit and there's been a small movement towards local community envolvement (i.e. not driving 50 miles to work, but working where you live), and we'll get there... but let's not get drastic.
~W
sig?
"The author was probably aware of these issues, but he didn't include them because don't factor into the consumer decision."
Really? If that were the case, almost zero hybrids would have been sold. The math in this article is not rocket-science, he is stating the obvious, and I imagine 98+% of the people buying them are full aware of the simple economics. I think your point may be valid for many, but certainly not all. Many, many people have bought hybrids (or are considering one), paying a definite premium, solely because they believe they are doing the right thing for the environment and the next generations of earth inhabitants.
It definitely does factor into many (not all) consumer's decisions.
The only athletic sport I ever mastered was backgammon - Douglas William Jerrold
As for needing wars to get that oil, these wars come about by interacting with a stunted, xenophobic society. It is unfortunate that this happens.
This is the kind of rationalization about wars that scares the hell out of me.
If you have to go to war repeatedlly to maintain your energy policy, despite having being bitten once 30 years ago, then something must be wrong with your policy. Especially when alternatives to oil already exists.
It's just that the populations of Islamic societies don't want to be in contact with Westerners.
This blanket generalization scares me even more.
But just to say oil is evil, etc. is not a solution.
Nobody is saying oil is evil. It is the irresponsible use of a limited resource, in an enviromentally damaging way, maintained by a myopic national energy policy which uses wars as a policy tool, that is evil.
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When hybrids become mainstream, I would think that the macroeconomic impact would be somewhat higher. The oil companies always tout supply and demand to explain the high price of gasoline and their record $32 billion profit in 2005. So, if people start driving hybrids, the actual gasoline usage would be halved, assuming that their everyday usage of a vehicle has not changed on average. Therefore, there would be an oversupply of gasoline, which in the basic theory of supply and demand, would drop the price.
But will that happen? Maybe not. The oil companies and OPEC like being profitable, so they would reduce production accordingly in order to keep the price high. That's why they always call OPEC a cartel right? It's just a fancy word for monopolistic orgy.
Coderz 4 Life
What would be the best of both worlds would be a marriage of Hybrid and BioDiesel. The Hybrid side of things would keep the mileage high, and the BioDiesel would keep the emissions much lower and much more of the fuel supply internal to the U.S.
We play the game with the bravery of being out of range
Ahhh, did anyone check the math. It looks a bit off. First he uses a 1.15 multiplier to account for 'other costs' THEN adds it to the loan value (i.e., interest oriented). If you read the endnote that is based on the fact that loans are for 115% of the value (payoff on old car?). How is that a legit 'cost' of the new hybrid car?
Second he is using the full cost of the hybrid. He is assuming that you dump a perfectly good car and buy a hybrid, NOT that you are bright enough to buy a hybrid when it is time to buy something. That is, he is assuming it is the full cost, not the incremental cost of the hybrid. While that MAY be a correct financial analysis, it is unlikely to be a real world analysis (IMO).
If I want a $22K hybrid and my other choice is a $18K car/SUV at 25MPG, then the 'additional capital expense' is $4K NOT $22K. $4K * 1.15 (assuming I use his magic math) is $4.6K incremental cost at 5.25% over 60 months that's about $88/mo in payment. Given the gas savings and higher trade in allowance, the case for a hybrid may be closer than he paints. Of course that assumes the competition for your car dollar is an SUV at 25 MPG if it is a small car at $15K and 30MPG then the hybrid case is less good.
The real issue is during a "I'm going to buy a new car, what will it be" purchase period. It is fair to deal with incremental costs and incremental improvements in gas mileage/trade-in value. As I read it, the article assumes a 'forced trade' at full cost, not incremental costs. I'm not sure that is a fair comparison.
How's that again? It takes more energy to *produce* a hybrid? You're insane.
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The office building I work in is located in one of those "We have everything in the world right here" communities: it has a church, a bank, a grocery store, a movie theater, several resteraunts and pubs, etc. One of my coworkers lives in this community, literally one block from the office. She drives to work EVERY DAY! She also drives home for lunch, then back to work, EVERY DAY! She lives two blocks from the gym; yep, she drives to the gym to work out three times/week.
Not terribly surprising, she is also the most useless sack of crap we have in our department: comes in at 9:30 - 10:00, takes a two hour lunch, goes home at 3:30-4:00. And constantly bitches about how swamped she is, while farming as much of her work out as possible. Too bad our department head is too soft to actually fire anyone... </rant>
...sometimes, in order to hurt someone very badly, you have to tell that person terrible lies. - PA
Yes and no. It's more a function of town planning. In the 60s and 70s the UK built a number of "new towns", moving people out of some of the more deprived areas in the cities (which were then flattened and rebuilt). Many, if not all, of these new towns are based around the car. Centralised shops vs local shops, the whole infrastructure requires a car really. This seems to be a continuing trend, in fact I believe it is nigh on impossible to get planning permission for e.g. a shop in these "residential areas". It's like someone is playing a very bad game of sim city!
There are many malls of course now, and the majority seem to be out of town. However, the ones near where I am do seem to have decent public transport links.
why do these Europeans buy *SUVs* when they could have remained "environmentally responsible" and purchased a compact or subcompact as they would have in Europe?
Because they are selfish, brain-dead morans. Here's my logic: People buy SUVs for a number of reasons, all of which are false. First there is the issue of percieved safety. People feel safer in them, despite the fact that they are entirely unstable; especially if you go over 50 mph. The number of SUVs on the road cruzing at 90 mph is staggering. I'd like to see them swerve to avoid a colision with their high centres-of-gravity. This "safety" aspect is also 100% selfish. Colide with a small car, who comes off worse? Fuck you buddy, as long as I'm alright.
Another reason why people by these heaps of junk is that they like the elevated driving position. Again, 100% selfish, as your high vehicle means I can no longer see the road through their windows. So, their improved vantage point is at my expense. When driving at speed, you should be watching the car 3 or 4 infront, not the one in front of you. Unless you want a SUV spare tire embedded in your brain.
One reason might be the olde cock-contest. Big is better, gotta "stay one up on the neighbours" as we say over here. SUVs became fashionable for a while with the 2.4 children brigade.
I'll tell you why - the selection of a vehicle has more to do with the fixed percentage of disposable income that a person is willing to spend on a vehicle and related expenditures.
To a certain extent. However, there are many expensive beautiful executive and sports cars costing way more. Perhaps, bang-for-buck you get "more" for your SUV, I couldn't say. I've never priced them as I literally hate the damn things. At least now bullbars are banned, making things slightly better for the pedestrian, but the chances are you are still going under the wheels as opposed to the up-and-over design of most cars.
Nothing annoys me more than seeing a SUV loaded with one person. Well, perhaps the SUV owner illegally stopping outside the school to drop the kids off. God forbid that they might get any exercise from the 5 minute walk!
I don't believe that taxing the hell out of the most basic element of an economoy is the roght method, either.
Yeah, but it makes a lot of money for the treasury, so guess which option they are going to pick? Our government doesn't have the same level of "investment" (sorry, "campain contributions") from the oil industry. I'd imagine if the US were to take a similar tack, Hariburton et al would instruct congress to vote against it.
Have you ever considered the possibility that public transportation is much more popular in Europe due to the greater population density?
The population density of the UK is 8 times that of the US. On average, the UK mass transit system gets 8 times the potential travelers for the same amount of track.
Other than a few cities, finding a public mass transit system that runs on time is a rarity in most areas of the US. Intercity mass transit is better -- there is greyhound, which is mostly dependable -- but expensive and slow.
Currently, I'm considering a nice used motorcycle. It isn't mass transit, but it is fast, dependable, and relatively efficient on gas.
Does he take into account tax credits and deductions available for hybrid cars? There is a $2000 federal tax deduction for buying ahybrid vehicle, which is probably worth about $400-800 depending on tax bracket and other factors. Plus some states have additional tax incentives for hybrid vehicles. In Colorado, I believe you can get a state tax credit for the full price difference between a hybrid and the closest comparable non-hybrid.
Of course, my wife and I probably would have bought a Prius regardless of cost difference had it been an option for us. Unfortunately, at the time we bought our car, there was a year wait to get a new 2004 Prius, and we needed a new car ASAP.
If I don't put anything here, will anyone recognize me anymore?
The real way to make a good economic comparison is to compare buying a new hybrid vs. buying a new conventional-engine car, and do a time-value-of-money calculation to get present values of the cars and gasoline. Sure, monthly payments are what hits you in the wallet when you're making them, but they go away once you've paid off the loan, so you can calculate the Net Present Value of any interest you might pay to car dealers (might be positive or negative, depending on whether they're doing loss-leader loans to keep the car price higher.) Assume you're going to keep them both for the same number of years (otherwise it's way too messy; more on this later), estimate the effective interest rate for money over the next N years (which is not the same as the interest on your car loan...), estimate the future value of the car at the time you sell it (and calculate NPV), estimate the NPV of the price of any repairs you'll need to make, estimate the price of gasoline and amount you'll use over that period and NPV that.
So does it pay off, or not? Depends a lot on what kind of car you'd get instead, how long you'd keep the cars, and on the assumptions you make about the future cost of money, gasoline, and used cars. If you're spending the same amount of money on the car (overinflated price of a hybrid vs. buying a fancy car), it's probably a win. If you're comparing the hybrid to an econobox, it's probably not a win. If you think cars last 15 years, and you're comparing the hybrid to a used econobox now, another one five years from now, and another one in ten years, it's almost definitely a big lose, but you get fewer coolness points for driving around in beaters during the first ten years (after that, your hybrid will also be a beater, and repair costs are much harder to predict than for standard cars.)
I'm not the typical American car consumer - I buy cars with cash, generally new, don't drive very far most days, and keep them till they die of old age or are sufficiently close financially, so I spend less on cars and more on repairs (though replacing the engine in an old van did cost about the same as buying a used van of similar vintage, but since it had spent most of its years in California instead of New Jersey, the body was in really good shape.) A few years back, when my 1985 Toyota was getting old, we were thinking about keeping it running for a couple more years and getting an electric, but then the PT Cruiser came out, so we decided to go with the cool car instead... bought it on eBay.
Bill Stewart
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I'm sorry but this is the type of idiocy that runs rampant (conservatives as well as librerals use it). If you don't get the result you want you claim the science is wrong. Economics is not a fundamentally flawed science. What you are calling economics is actually finance. This guy ran a financial analysis NOT an economic one.
With a proper and more full economic analysis you would include costs to the environment (say the cost of cleaning up extra pollution, or the opportunity costs of using the oil for gas, or economies of scale when more people purchase hybrids). Poor analysis isn't the fault of economics, it is the fault of the economist.
Cost and pricing, according to economic theory, are supposed to represent actual real-world values of labor and resources consumed to produce something.
Absolutely false, unless you're Karl Marx.
The fact that economics cannot properly account, even remotely, the degradation of the environment
A great deal of economics is devoted to examining the problems of externalities.
The only route to redefining the costs and economic behaviors is government regulation
As if governments look out for the best interests of the common people. Look at the environmental conditions of the Soviet bloc during the cold war.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
That's what I never see anyone ask: How long do I have to drive an SUV for it to pay for itself, or at least for the bloated price which gives the manufacturer their crack-like fat profit margin.
Of course, the answer is: never. It never pays for itself. An SUV is a money sink, everyone knows that, so people discreetly ignore this.
Meanwhile, they pose the question about hybrids, and play it up as if it's some kind of 'gotcha'.
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1) The brake pads will wear less because of regenerative braking
Well, let us see what brake pads for a prius cost:
brake pads for a prius Oh. $28.79
2) NO transmission repair costs, it uses constant mesh planetary gears instead
I have Toyotas out in the back pasture that have been retired at 264000 miles due to rust. I have never seen a transmission failure/problem in a Toyota car
3) minimized eng wear because the electric motor handles high torque demands
Motor ( a 4AFE ) was still running when car was retired due to rust. Only weak spot on these cars is deposits on the valve stems which make the valves stick open. I just pull the heads, beadblast the valves and heads, have the seats cut and the valves ground, reassemble, total cost in parts is $80 to cut the seats and the valves, about $30 for head gasket and sundries.
4) minimized eng wear because the engine is spun up BEFORE any cylinder ignition
See Above!
5) minimized eng wear because the engine fires 2 cyl and then the other 2 on start
Huh?
6) The engine was designed lighter because of the shared load so bearing wear is reduced
This is just not an issue if you keep the oil changed. The engine will outlast the rest of the car.
7) minimized eng and exhaust system wear because of first 5 minute warmup cycle
Exhaust wear will be worse, because of the multiple heating and cooling cycle. An exhaust system kept hot 100% of the time will last longest because the most destructive corrosion does not occur at elevated temperature.
To sum up: The prius will not save you money on repair just because it is a hybrid. Anyone who can assemble a PC can change the brake pads by following the instructions in the Toyota service manual which is available by calling Toyota MDC
There's always buy the car you use everyday, rent/borrow the vehicle you need for special activities. You can win both ways there.
"But pricing will take care of this. And this is very basic economics. It involves the laws of supply and demand. As the supply of the resource decreases, it's cost will increase past the cost of the next best alternative. At which point, everyone will stop using that resource. In other words, we will never (ever) run out of oil. It will, at some point before we run out, become to expensive to use. So no one will use it. No government regulation required."
But many lives will needlessly be lost due to energy shortages (see: heating oil becomes too expensive [that is happening now], food becomes too expensive to transport cheaply [is this inevitable?]) and air and water will be needlessly polluted while the free market waits for reality to correct its wasteful, polluting ways.
Your holy mantra of waiting for the market to correct everything is as evil and devastating to society as trusting EVERYTHING to the Government. Hell, why not just let computers rule us and govern our lives by credit and debit projections on a ledger sheet? That is ultimately what "what will the market do?" mentality leads to.
--- Grow a pair, liberals... stop letting the Republicans bully you!
The question is: Where do you get the (huge) amounts of energy from that you need to run these processes on an industrial scale ? The only real answer is nuclear power. No way you're going to produce that much power any other way (well, maybe by burning fossil fuels, but that'd be kinda pointless, right ? ).
This technology is essentially hydrocarbon recycling.
Marketingspeak. Recycling usually implies more than one cycle, which isn't the case here. Once your produced hydrocarbons end up as motor vehicle fuel, they'll become CO2 + H20 in short order, which stops the "cycle". Of course, you can then go on and make hydrocarbons out of CO2 and H2O, but that requires event more massive amounts of energy and/or space.
It would also present a parallel avenue of development for existing oil companies, creating incentive for them to actually support an environmentally friendly technology rather than to thwart it.
No way they are going to develop anything other than oil as long as there's still huge profits to be this way. You can be sure they have at least a dozen of plans in drawers somewhere, safely awaiting the time when oil isn't profitable anymore.
As others have pointed out, that is an incomplete, and thus inaccurate, financial comparison. Of course that is very typical of such comparisons, most of which leave out the residual sale value of the car, and in this particular case even leaves out government incentives (including the possible advantages of free parking or using carpool lanes, which could save not only money, including bypassing bridge tolls and parking fees, but time, which can be equated to the same thing). While it does mention these things almost as footnotes, in typical fashion this one stacks the deck against the hybrid in some important respects in its main calculations, making a hybrid seem like a waste of money when it really might not be.
(This may also be true of solar power: such analyses generally omit any possible increase in the selling value of the home as a result of the solar system. It's even plausible such systems could sometimes pay for themselves in the long run due to increased home value alone, let alone any energy savings in the meantime, but the people appearantly trying to discredit such technology usually don't want to look at those numbers.)
In addition, as has also been pointed out, why on earth is energy-saving technology the only area that people should be forced to justify their purchases based on economic return? How do you justify that fancy paint job, those snazzy wheels, that killer stereo, that funky spoiler, that leather trim, or any number of other fairly useless features that increase the purchase price of a car? (Or even the 300 horsepower engine - it can tangibly increase acceleration capability, but what is the economic value of having faster acceleration? Is that benefit worth the increased cost of the car and increased fuel use?) How could anyone ever possibly justify buying a $70,000 Porsche, Mercedes or Hummer? Where are the demands for economic or financial analyses to justify the cost effectiveness of those vehicles? (And ditto for many factors affecting the price of a home, or any other purchase.)