In a recent article in the Wall Street Journal, Liam Denning writes about a Boston Consulting Group analysis of the ownership costs of combustion, hybrid, all electric and plug-in vehicles. The BCG study calculated the combustion vehicle costs based on tightened emissions standards, projecting 47 miles per gallon in a compact car. They looked at the increased costs of attaining this efficiency versus the costs involved in hybrid, electric and plug in vehicles. Other assumptions included a gasoline price of $4.50 per gallon and annual maintenance costs of $400 for the internal combustion engine vehicle down to $200 per year for the pure electric vehicle.
In the end, the payback on the hybrid took just under six year, the plug-in payback took seven years and the electric about eight years. While the article didn't talk about the average length of car ownership in the United States, I was surprised that these paybacks were seen as " a long time in car years; beyond the expiry of a typical lease". What is missing here, I think, is an understanding of the mindset of the hybrid/electric car buyer. Do you really think these niche consumers lease and get a new car every few years? I'd posit these vehicle purchasers are motivated by conservation values, and realize the waste, both of finances and natural resources, in the purchasing habits based on the disposable society. I'd love to see a study of how long owners of "high efficiency vehicles" keep their cars, as compared to owners of internal combustion vehicles.
As some of you know, I drive a 2006 Toyota Highland Hybrid. None of the calculations in the article or study pertain to a SUV that gets, on a good day 29 mpg and gas prices well below $4.50 per gallon. That being said, I bought the hybrid in the spring of 2005 and expect to have it about another four years. Some day my pay back will come...
The Wall Street Journal won't link to the whole story (you'd have to subscribe on line for that), but you may read the intro if you click here.
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