Are Hybrids Worth It?

The Toyota Prius may be a status car, but is it worth it economically?

Here are comparisons of price, miles per gallon, gallons per mile, and cost per mile (in terms of gasoline only and assuming that gas sells for $2/gallon) for three comparable Toyota models, the Prius, the Echo, and the Corolla.

Model Price MPG GPM CPM
Prius $20,810 51 0.01961 3.92¢
Echo $10,870 41 0.0244 4.88¢
Corolla $14,195 40 0.025 5.00¢

The Prius costs $9,940 more than the Echo and saves just under one cent (.96¢) per mile to operate. Given this price and cost differential you would have to drive the Prius 1 million miles before you realized any savings from the increased fuel efficiency. For the Corolla, the price of the Prius is $6,615 greater and the savings a little more than one cent (1.08¢), which means that you would have to drive 612,500 miles before the reduced operating costs justify the higher price. Even when you use the 60 mph for the Prius as noted in the article you still would have to drive 641,290 miles and 396,829 miles before you realized gains from the increased fuel efficiency relative to the Echo or the Corolla respectively.

The environmental benefits are inconclusive, yet possibly worth the additional cost for some. However, what happens to fuel cells when they are discarded?

Addendum: Of course I have not discounted the savings from the cost of operating the Prius, which are benefits accrued in the future, against the up front cost of the car itself. This would decrease the cost advantage even further.

Also, it must be noted that the Prius sells for more partly because the resources used to build the Prius (fuel cell technology) are in scarcer supply relative to the resources used to build the Corolla and Echo. An argument for fuel efficiency is to conserve gasoline. Why is it noble and worthy to conserve gasoline, a scarce resource, but not the scarce resources used to construct the Prius?

Comments

[Ethan]

Just the other day I saw a brand new Civic hybrid with the vanity license plate REUSE. Something about seeing that on a new car.

You did leave out government interference with the market, since hybrid buyers can take advantage of a (phasing out) tax credit:
http://www.fueleconomy.gov/feg/tax_afv.shtml#cleanfuel
It'd be $1500 on this car, although even still the best case is 300k miles to recover the cost.

Do you know whether Toyota and Honda are still losing a lot on each hybrid sold? Back when they were introduced it was $15k-20k per vehicle. What is the market logic behind such private subsidies? Strictly PR?

[gw]

The Toyota Prius does not have a fuel cell. No additional scarce resource.

The Prius is basically a electric car with a hybrid electric storage system (battery, IC engine/gasoline).

I doubt Toyota is losing $15k per car sold. Where are you getting this info?

Also what if gas prices rise much higher than $2/gallon. Pruis buyers might think gas prices might rise significantly in the next 10 years. Can you be so sure it won't?

[Shanaynay]

Just give me an escalade with some chromed out rims, bullet proof windows, and a life jacket (I cant swim).

[me and you]

THIS IS ALL SO CONFUSING. BRAIN HURT.