Stop the Financial Double-Standard for Green Cars
by Michael Graham Richard, Gatineau, Canada on 03.27.08

It seems like many people, especially in the big media, are obsessed with whether or not that hybrid/plug in hybrid/electric car/etc will "pay for itself" with fuel savings. The latest example is the (misleading) "The payoff for plug-in hybrids: 95 years?".
Sometimes it is specifically claimed that "car X" will save you money, and it's only natural to examine that claim. We have no problem with that. But the meme seems to have taken a life of its own and now it seems that people think the whole point of green(er) transportation is saving money, and that it's the yardstick to measure all new green cars against. That's plain ridiculous. Since when are cars supposed to pay for themselves anyway?
When someone decides to pay extra for the bigger V6 engine, or the sunroof, or the nicer wheels, who's asking them if it will "pay for itself"? Why are people allowed to make personal choices based on aesthetics or performance requirements (real or imagined) without having to justify themselves, while people who want cleaner cars because they want lower emissions, or enjoy driving in electric mode, or want to encourage new cleaner technology, or whatever, are asked to make a financial case?
At least the extra money spent on a more efficient vehicle will partly pay for itself (if not pay for itself completely, depending on conditions). A big engine will just cost more to get and then cost more to operate.
Lets stop the financial double-standard for green(er) cars, unless the question really is "will it pay for itself?".
See also: ::Green Basics: Hybrid-Electric Cars, ::Green Basics: Electric Vehicles and Cars

















Amen. Ditto Solar Panels, Radiant Heating, etc etc etc...
The reason for this is because the whole point is to avoid having to pay for expensive gas, so of course people are going to expect lower operating costs.
"Why are people allowed to make personal choices based on aesthetics or performance requirements (real or imagined) without having to justify themselves,"
But they do -- both on criteria which we disdain, which they measure in bang-for-buck terms, and those which we affirm -- say, when we are annoyed by Hummer drivers.
"...while people who want cleaner cars . . . are asked to make a financial case?"
Two reasons. One, we generally present ourselves as more rational and concerned with other life. Rationality means that, beyond a certain additional cost, the money spent on one pollution-mitigating technology would be better environmentally spent elsewhere. Two, we all know that once a tech has a short break-even time line, consumer uptake will improve and call for subsidies will resonate better with the public. That is a key turning point.
Ron, did you even read the post? his whole point is that sometimes the question is about saving fuel, but sometimes it isn't, and it's not okay to pretend like it's the only factor for everybody, making it a double-standard that isn't applied with other things.
The TCO is relevant b/c while we (i drive a Prius) may make choices for reasons other than purely economic, many, many others do not. And many folks believe (and i think they are correct) that we can't expect widespread adoption of cleaner cars until those cars are as efficient cost-wise as they are efficient fuel-wise. Clearly that is not the deciding factor for all of us. But we shouldn't be so naive (or arrogant) as to believe others are "wrong" just because they aren't as "enlightened" as we are.
Further, I submit that the Hybrid vs Sunroof comparison doesn't work. No groups are out there protesting that folks give up their sunroofs because they "don't make sense." Conversely many, many folks argue that buying inefficient vehicles "doesn't make sense." As a result, people/media have every right to investigate the validity in those claims. And economics is surely a legit area to focus on when studying that claim. It isn't the only area, but that makes it no less legit.
The financial argument is: if prospective car-buyer X is able to spend $18K for a new car, but a hybrid costs $23K, is there some way he or she can offset the additional $5K and thus justify the purchase? Same with home solar panels, although there the additional amount you have to amortize is astronomically larger both because of the cost of the panels and because it is an additional system, not a replacement.
Yes, some people can pay more if they want to, regardless of the cost savings over time. But just as average homeowners who might really love solar panels can't possibly afford them, average car-buyers who can't afford a Prius simply can't have one. The thing is, people who CAN afford them are often really paying for the luxury of looking down their noses at people driving older cars that they may not be able to afford to replace.
The question really is, how can we make it easier for people to replace or retrofit less efficient vehicles than it is now, since it's become clear that they want to?
The whole point that these issues are calculated financially is because for many people themain point of a hybrid is not about the environment but about economics. Now why is that bad? Isn't this what Al Gore postulated in his original presidential campaign ( higher fuel taxes as circumvention of usage ) ?
For a family of people that are living on the edge,making a car change just for the sake of saving on fuel has to be properly understood or they could make a bad financial decision and be even more derided over the whole environment fiasco.
And even worse scenario is the question of where plugin hybrids are going to be receiving their juice. Coal?
While people pay attention instantly to the bottom line, I think it safe to say that that is the same thinking that got us here in the first place...
"The significant problems we have cannot be solved at the same level of thinking with which we created them."
Albert Einstein
Right, Anon?
HG
Paying for itself may not be the goal of hybrids or electrics, but if we want these cars to take off and become common they sure do need to come down in price.
Perhaps the question that needs to be asked is, "Why are they so expensive?" I think there's a lot of price gouging and taking advantage of the chic-ness of green. Perhaps no crime in a capitalist country, but ultimately not the best moral decision.
"Perhaps the question that needs to be asked is, "Why are they so expensive?" I think there's a lot of price gouging and taking advantage of the chic-ness of green. Perhaps no crime in a capitalist country, but ultimately not the best moral decision."
The high prices are perfectly normal because hybrids and such as supply-constrained.
High prices make it more attractive to produce more hybrids, and for more companies to start making them. Once supply catches up with demand, prices will go down.
If prices were lower now, without an increase in supply, it would be WORSE for the environment.
It's not a single standard, let alone a double standard. If you wish to buy a 'green' car without considering overall cost that is up to you. No one is judging you.I, however, won't buy a hybrid because it isn't financially favorable at the moment.
I just purchased a car that had the options I wanted and was willing to pay for those options. It gets reasonable fuel mileage (double my previous vehicle). If there was a hybrid available that had the options I wanted, fit my needs and got fuel mileage to offset the price premium I would have bought it.
I won't buy a hybrid just because it is a hybrid. If I were willing to do that, I could justify a Yukon even though I don't need anything that large and it gets worse fuel mileage than my current vehicle.
Hybrids are still in their infancy. As battery technology matures so that the electric half of the power-train can do more for longer, increasing fuel mileage to the point of offsetting their price premium, more people will buy them.
There are people driving 10+ year old vehicles that can barely afford the fuel to get to work. If they could buy a newer vehicle which got better fuel mileage would you look down on them for not getting a hybrid or would you realize that they are doing the best they can with what they have?
Bleh, I could go on and on but I get myself worked up when I see posts like this. You don't have to justify to me why you bought a 'green' vehicle but if you want me to buy one, start justifying.
Much of this stems from the fact that rising fuel prices have pushed people to look for fuel-efficient cars today. Other perks are included in the car sales but it leave a lot to be desired if they are indeed green compliant.
Great points made by this article.
Here's the comparison I want to see publicized--what is the cost of the hybrid plus its fuel compared to the non-hybrid plus its fuel.
The media always seems to compare the base cost of, say, a Prius against the base cost of the average car, and then expects the Prius alone to reset the "cost balance" to zero.
But add up all the extra fuel that a regular auto uses, and I bet the Prius will save lots of money compared to the regular car, even if it were to never "make up for" its own original cost.
Kevin, the problem there depends on how much you drive. Supposedly the average American drives 15k miles a year (yikes! I've never driven that much in a year in my life!). For someone like me, however, who keeps trying to reduce the number of miles I drive (my target is about 6000 this year), that means that I would NEVER regain the cost of the hybrid car versus the non-hybrid. Add in the fact that I don't care about the car I drive so much, I'd rather have a compact with minimal options than a Prius with 4 doors and all the fancy tech stuff... it just doesn't make sense for me to buy a hybrid. I can get a 2-dr civic for much cheaper than a hybrid civic, and since I don't need 4 doors or extra features, why should I buy the hybrid?
In reality, we need to quit focusing on hybrids. Half of a car's environmental impact comes from producing it and the roads is uses. We just need to try to drive less!
Thanks for discussing the issue of payback and investment. A car never pays for itself. It's always a money losing venture, you lose money the minute you drive it off the lot. So, why should getting a return on your investment only enter the conversation when it comes to hybrids and AFVs? Single occupancy vehicle travel is a losing proposition, no matter how you slice it. The least we can do is drive a hybrid or other clean fuel vehicle.
Hybrid cars today are more expensive because they weren't designed from the ground up to be hybrids.
They are regular cars with hybrid equipment added on. They'll always cost more that way.
What we need is true native hybrid designs like modern trains use.
Polyphase electric hub motors don't need transmissions or differentials and allow the motor to operate only in the peak efficiency range. They also allow use of turbines and other designs not suited to stop and go or low RPM ranges.
Thanks for posting this. The point can't be made often enough: tens of millions of people are wililng to pay for the "environmental feature," just like others pay for leather seats, etc. They're often just behind the early adopters (like those who will pay $10K to convert a Prius to a plug-in hybrid, knowing they'll not pay it back, but simply wanting to drive the world's cleanest extended range vehicle).
Many studies show people who buy hybrids don't pay attention to payback. Part of it is that they understand a very fundamental fact: the benefits are broadly provided to society, not only to the individual driver (that's the reason companies, states and the federal government sometimes provide tax credits or deductions in recognition of the social benefit).
Those who think humans are rational creatures who are constantly doing cost-benefit analyses have to wonder what we're doing when we face what many call "the greatest market failure in the history of civilization" -- our inability to price the externalities represented by the emissions of greenhouse gases.
-- Felix Kramer, Founder, The California Cars INitiative (CalCars.org)
My name is Stephanie with MyRide.com, here is a breakdown of how
various green cars net out:
http://www.myride.com/research/editorial/makeandmodel/mixedsources.html?editorialId=1317
If one wishes large numbers of people to choose a course of action voluntarily, it helps to have lots of reasons to do so -- the more direct and immediate, the better.
"Saving the planet" is a terrific reason. But it's too abstract and distant to drive a large purchasing decision for many people, especially in tight economic times. "Coming out ahead within a couple of decades" is enough to cause many people to choose purchasing rather than renting a dwelling, despite an initial financial hit -- and "coming out ahead within a few years" would be direct enough to cause many more people to choose a hybrid. If we rely on the abstract and distant, too many people have little real choice except to make their choice based on their desperately stretched next paycheck rather than the long-term health of the planet.
Cost of a hybrid -
The Altima hybrid costs 5K more than the same 4 cylinder. Back off the 2350 federal tax credit and your 2.6K in the hole. Assuming you improve 10 MPG and you drive roughly 15K miles annually @ an avg 30 MPG efficiency, you'll save around 200-250 gallons of gas. At 3.25 a gallon that is $650-812 savings or a 4 yr payback. Rachet up gas prices to 4.25 a gallon and thats 800-1050 savings a year and break even is 2.5 yrs. Drive more than 15K a year, even quicker. You'll own the car a minimum of 5 if not longer. It is economical. I bet you'll see 4.25 this summer and 5.25 next summer. Look at Eurpoe where gas prices are much higher. Given their dollar is stronger than the US dollar, our gas still cheap. We just whine about it way too much. Negotiate the price of the car down a little and you'll break even in 2 years @ 15K miles annualy. 198 horse-power not needing to sacrafice one bit compared to a V6 engine getting a 50% boost in fuel economy (20 vs 30 MPG); not a bad trade-off. The Altima has plenty of power for hills and highway entrances.