Hybrid Hubris

The Detroit News reports that in a J.D. Power survey, more than half of Americans say they would consider buying a gas-electric hybrid vehicle. However, the devil is in the details.

Yet U.S. car buyers may have unrealistic expectations about how much fuel -- and money -- they'll actually save by going green with one of many emerging, non-gas options.

Among those considering a hybrid, for instance, the belief is there will be a 28 mpg fuel economy improvement over a gas vehicle. In reality, the improvement is closer to 9 mpg, according to J.D. Power and Associates' 2006 Alternative Powertrain Study.

The survey also found that consumers expected to pay a $5250 premium for a hybrid vehicle.

So let's do some quick math. A 28mpg improvement means a savings of $965 a year, assuming 21mpg non hybrid economy, 12000 mi/yr, and $3/gal gas.*

You could interpret this to mean that people want a hybrid to payoff in about 5 years. This is reasonable, as the average car owner keeps a car for about 8 years.

But the truth is, only the stingiest of curent hybrids (Prius, Civic) come out ahead over 5 years, according to Consumer Reports, and to get there they had to assume $4 gas and federal tax breaks. (my post on this here).

Hybrids don't make economic sense, which is why they are more of a fashion statement at this point than a consumer movement.

* Non hybrid: 12000mi/21mpg * 3$/gal = $1714/yr;
hybrid: 12000mi/48mpg * 3$/gal = $750/yr