Will
Americans really buy plug-in hybrid vehicles?
Wednesday, December 04, 2007
Would
consumers flock to 100 mpg $30,000 plug-in Prius hybrids?
In several recent posts, I've made some negative
statements regarding plug-in
hybrid vehicles. So, have I changed my mind about
something I've called a revolutionary technology?
No. I'm still a huge advocate of plug-in hybrid vehicles.
Still, I'm a bigger fan of lithium than of plug-in
hybrids. Ultimately, I have serious concerns about the
electric grid in terms of reliability, security and
greenness. Thus, a lithium hybrid with some kind of
capacitor might actually make better sense in terms of
fuel economy, cost, emissions, etc - at least for some
drivers.
Still, if plug-in hybrids ended foreign oil dependency
without any reduction in greenhouse gas emissions, that's
still a huge win, and one I could easily support. The
savings from no longer having to secure foreign oil
dependency could then help develop a cleaner grid.
Of course, politicians would mess that transfer of money
into pork and corn, no doubt.
In reality, my chagrin with plug-in hybrids really isn't
about the vehicles, it's predominantly with consumers and
with Congress.
Today, the Toyota
Prius and the Toyota
Camry hybrid provide a cost-effective option for
consumers to significantly fight foreign oil dependence
and global warming emission. Not only are these vehicles
cost effective if you own them for a little over 4 years,
they are a smart financial move if you own them for more
than 5 years and an excellent hedge against high gas
prices. And, if you commute regularly in an urban area,
these hybrids can become a smart financial move even
earlier.
And that's without tax credits.
Yet, while a significant percent of Americans have
expressed serious interest in hybrid vehicles - more than
60 percent according to Mike Jackson's AutoNation, just 2
percent actually backup this interest with a purchase.
Certainly, not all hybrids are as cost effective as
Toyota's two leading hybrids, so that could be a big part
of the problem. Nonetheless, a significant percent of
Prius buyers make more than $100,000 per year of combined
income. The average American family makes far less than
that amount.
Perhaps if Congress extended Toyota's tax credits, many
more Americans would choose a Camry hybrid, rather than a
conventional Camry, or a Highlander
hybrid, rather than a conventional Highlander. Or, the
Prius would become more affordable for average income
families.
Unfortunately, Congress would rather tell people and
automakers what they can't do, rather than inspiring and
incentivizing them to do what the should do.
Hence, even though many have expressed interest in plug-in
hybrid vehicles, I think most express that interest with
one major caveat - they want the plug-in hybrid to cost
almost exactly as much as their conventional vehicle of
choice. That just isn't going to happen with the first few
generations of plug-in hybrids.
Certainly, there are many hardcore plug-in fans that will
buy such hybrids. The interest in the Chevy
Volt, for example, demonstrates this pent up demand.
Still, I cannot help but be skeptical when it comes to
consumers and Congress doing the right thing.
It seems these days, many American are very concerned with
issues like global warming. Yet, it seems few Americans
are really doing anything. Like politicians, consumers
talk the talk, but when it comes time to take action, they
flop. I fear that if there is a price premium for plug-in
hybrids that requires the same sort long term thinking as
today's hybrids, there will be a lot more flip-flopping
with average consumers.
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