Will Plug-in Hybrids Save Us From High Gas Prices?
May 1st, 2008 Posted in Auto Industry, Car Reviews, Eric Peters, Fuel
By Eric Peters, Automotive Columnist
The hype about these vehicles — which differ from the current crop of gas-electric hybrids in that they can run on pure battery power for longer and, when their batteries run down, can draw power from a household outlet instead of an internal combustion engine — is that they have the potential to lower fuel consumption by as much as 20-40 percent over what the best conventional hybrid cars (like the Toyota Prius) can deliver.
But, there’s a catch. Several, actually.
The first is that while it’s true a plug-in hybrid (such as the soon-to-be-here GM Volt) can deliver impressive fuel efficiency, it’s important to keep one’s eye on the total operating costs of the vehicle — including its purchase price. GM has indicated that the MSRP sticker price of the forthcoming Volt will be in the $40,000-$45,000 range. That is about ten to fifteen thousand dollars more than the cost of the Toyota Prius — which is otherwise similar to the Volt in terms of its physical size, layout and passenger-carrying capacity. It is also in the same ballpark, price-wise, as a typical mid-level luxury sedan such as a Mercedes E-Class or BMW 5-Series.
In other words, serious coin.
And there’s the Catch-22. People who are worried — really worried — about the cost of fuel are necessarily worried about the cost of everything. And if you are having trouble paying an extra $15-$20 to fill-up (this year’s prices vs. prices of say two years ago) then, surely, you’d be at least as leery about buying a new car that costs $40,000 or more — no matter how “efficient” it may be. You still have to make those payments — up front and every month — no matter how much you’re “saving” on fuel. And the payment on a $40,000 car is probably going to run you around $500 per month, for four or five years. Maybe six.
But you’ll make it up in reduced fuel costs — right? Well, you might. But to get there, you’ll first have to spend a huge amount of money (huge for the average American, at any rate). Money spent is money spent — whether it’s for fuel, or to buy a fuel efficient (but massively expensive) new car.
Even if gas gets to $5 per — and it very well may — $40,000 buys a lot of it. Do the math. Five bucks per times, say, 15 gallons (the typical capacity of a current-year small car). Ok. That is $75 for a full tank. Assume a tank lasts one week. That means a monthly fuel bill of $300 — or about $3,600 annually. Let’s round it off to $4,000 per year. That means (roughly) you’d need to drive the Volt for about three years before reaching the “break even” point relative to a new Prius. That is a long time to wait for a return on your “investment” (and don’t forget that the huge money you sank into the Volt could have been used to finance a real investment — one that appreciates in value — like a 401k, purchase a CD - etc.).
But after three years, hey, I’m in the black at last… right? Yes — if you begin with the assumption that you have spent at least Prius-equivalent money on a new car. If instead you bought a two or three year old standard (non-hybrid) economy compact - something like a Toyota Yaris or Corolla, a Honda Fit or Chevy Aveo, etc. — the numbers are not with you. Cars such as the foregoing can be purchased for under $10,000 with very low mileage and in near-new condition, with a good portion of their original warranty still in effect. Buy such a car and you have spent only about a fourth as much as you’d have spent on a new Volt (and about half the amount you’d have spent on a new Prius). How many years will it take the Volt owner to make up the $30,000 (and up) price differential?
Well, you get the point.
If the object of the exercise is to save money vs. saving gas then it is hard to see the sense in buying a new hybrid, plug-in or otherwise. A low cost — and better yet, paid-for — car of any type is hard to beat, even if it doesn’t get the world’s best gas mileage.
There’s another issue with plug-ins, though.
It is simply that electricity isn’t free. You may not be paying at the pump, but unless you’ve got a solar array, count on getting a bill from your utility provider. Juicing up a plug-in hybrid is like running any other appliance — it costs money. You’d be crazy not to factor this into the total operating expenses of owning a plug-in hybrid (including the cost of charging it up) vs. keeping and driving whatever you’re driving now (or driving a low cost/decent mileage “beater”).
And there are real concerns about what may happen in the event large numbers of plug-in hybrids begin to tie into the grid. Our electrical generating capacity is already at or very near maximum capacity and unless we begin building new plants, pronto, we can expect two things to happen. The first is brownouts (or even blackouts) and/or restrictions on how much power we may use — and when. The next is higher electrical bills, the inevitable side effect of rapidly upticking demand that cannot be met by a commensurate increase in supply. The nut of it is, we may soon be paying a lot more for utilities each month. And, again — money spent is money spent. It doesn’t matter, in the final analysis, what we spent it on. Only that it has been spent.
I don’t mean to savage plug-ins or hybrids; the technology is brilliant — and the intent is well-meant. However, I do believe people are getting caught up in the hype — and if they really mean to save money, there might be better ways of doing it.
At least, for now.
If we can figure out a way to produce large amounts of low-cost electricity, for example, then a plug-in hybrid would be a beautiful thing. And if the cost to buy these things can be reduced to at least somewhere close to the current cost of a standard compact sedan — in the low $20k range or so — then even better.
But until one or both of these conditions is met, it’s hard to make a dollars and cents case for hybrid cars, plug-in or otherwise.
Comments?
www.ericpetersautos.com
Image Credit: GM-Volt
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7 Responses to “Will Plug-in Hybrids Save Us From High Gas Prices?”
By Fleet admiral on Jul 12, 2008
The only way this would work is if you had a battery that was charged during the day using solar panels, then discharged into the car at night.
But needless to say, the GERMANS have developed, and most likely will be the first to sell hydrogen cars, like they have their Mercedes fuel cell buses since 2004. So the point is moot.
VW is making a diesel electric hybrid, but for the Euro market only. It gets 70+ mpg.
By Joel M. Kauffman on May 29, 2008
Too bad no real figures for energy were used. For driving a vehicle with a Cd of 0.35 at 70 mph takes 30 hp, and the vehicle gets 30 mpg. If done for 1 h, then 2.33 gal of gasoline are used. At $4/gal this is $9.3 worth. It also means that 22 kWh are delivered to the drive wheels.
For an electric to deliver 22 kWh to the drive wheels and heat/defrost the vehicle, 31 kWh are needed. Even at the 16¢/kWh I now pay, this is $5.
In city traffic the electric would look even better, being off most of the time.
By Dan on May 10, 2008
Agreed Tom. The market price of electricity is far lower at night, and indeed becomes negative at some points and at some locations (it costs lots of money to shut down and start up big power plants!).
Furthermore, some visions of plug-in hybrids and the “smart grid” involve using PHEVs to store energy at night and sell it during the day to do peak shaving. This might finally introduce a non-trivial amount of storage capacity to the electric grid, an ability that would be very valuable to grid operators, particularly to smooth out the variations in power output of renewable sources such as wind and solar. In fact, a more in depth evaluation of the total cost of a PHEV should include the economic gains to the consumer of this possibility.
In addition, environmental gains will not just result after the grid gets “cleaner”, it would be very much a reality now. Large fossil plants are far more efficient than small vehicle engines. Centralized plants have hundreds of millions of dollars of air scrubbing technology that are not available on consumer vehicles. Furthermore, wind energy is typically highest at night when overall demand is lowest, a huge drawback for wind power. Smart metering that encourages people to charge up at night will be very beneficial towards using the large amounts of wind power that are projected to come online in the next decade.
By Tom on May 8, 2008
I agree that plug-in hybrids or even plain hybrids are not really ready for the mainstream public who wants to save money. But, for those who can afford to make a difference in the environment as well as reducing foreign oil consumption and still be able to drive a car that is similar to what we’ve grown used to, they are the best options at the moment.
In regards to the electricity costs, you have to remember that plug-in hybrids will mainly be recharging at night. With the advent of smart utility meters (and they are coming, my friends!), there will be incentives from the electric companies to entice consumers to perform the recharging at night since power demands are lower. Power generators (gas, hydro, coal & oil) won’t have to waste away electricity that they cannot sell. After all, until they perfect the superconductor coils to store electricity with almost no loss, there currently is no method to store the power they generate at off-peak hours.
For me, I drive a non-hybrid Civic and ride my road bicycle @80-100 miles a week. I can wait until the technology gets a little more mainstream.
By Joe on May 7, 2008
The comparison is IF you bought a DIFFERENT small car that has a 15 Gal tank, and you use that up every week at $5/Gal. After 3 years, you would have spent $12,000. Which is approximately the premium paid for the Volt.
I think the point was that for those of us who can afford to pay more to reduce pollution is a fine deal, but those who are seeing plug-ins as a way to save on fuel cost, we have a way to go yet.
By mlganser3 on May 5, 2008
Johannas has right to be confused by this piece of pro-oil propaganda.
My Hybrid Civic has a 13 gallon tank, and I get around 500 miles (plus or minus, depending on the weather) per tank. Maybe Mr. Peters commutes 50 miles each way, but doubtful.
The other big argument is that by plugging in, the hybrid really isn’t helping because that power needs to come from somewhere. This is true, but hopefully as the grid gets away from carbon-based fuels (gas, oil, coal are all bad, despite the commercials) plugging in a car is much cleaner than filling up.
Frankly, I’d much rather live downwind from a nuclear plant than a coal plant any day.
Lastly, if the argument only comes back to money, then the author should ride a bike or take a bus. As with any new technology, it will not be necessarily financially sound until the technology matures.
If the equation is financially break even(which I’ll admit may be true - today), then money is a moot point. That said, the choice is to pollute or not to pollute. I’d rather not, even if it does cost a negligible amount more each year.
By Johannas on May 2, 2008
I’m confused. The article states:
“Five bucks per times, say, 15 gallons (the typical capacity of a current-year small car). Ok. That is $75 for a full tank. Assume a tank lasts one week. That means a monthly fuel bill of $300 — or about $3,600 annually. Let’s round it off to $4,000 per year. That means (roughly) you’d need to drive the Volt for about three years before reaching the “break even” point relative to a new Prius.”
I would hope that a Volt would not require a full 15 gallons of gas every week, being that it is a mostly electric engine. Have I missed something?