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Toyota Camry Hybrid, Toyota Highlander Hybrid, Honda Civic Hybrid, Ford Escape Hybrid, Chevrolet Malibu Hybrid, Lexus RX 400h, Hybrid Cars
#379 of 627 Re: completely odd logic [larsb]
Jul 30, 2007 (7:32 am)
"Similarly equipped cars" -- there's the problem. Buyer-by-buyer basis is true to a point, but lets try to look at it objectively.
What could be a single model, Camry, with a list of options, has been stratified into CE, LE, XLE, Hybrid, and, I will ignore here, SE models. And the available options are set to encourage higher models (the CE is a bargain compared the the LE, but has very limited list of options). The 2008 Hybrid is almost an LE, except the Hybrid has automatic climate control which is otherwise only available, and standard, on the XLE. The 2007 Hybrid is almost an XLE, except the XLE has reclining rear seats and fake wood trim. And for the comparison should one use 4 cylinder ICE + automatic transmission or the V6?
This is not meant to be a criticism of Toyota, because all manufactures use this confusing scheme.
#380 of 627 Re: completely odd logic [gagrice]
Jul 30, 2007 (12:07 pm)
"I was only agreeing with moparbad on this one. If a person wants a basic CE Camry that gets the added MPG of the hybrid they will pay a $5700 premium. That is according to your price schedule."
I think there is another factor that people are not seeing here. The hybrid premium is known only to Toyota (exactly how much the hybridization costs). Trying to do basic subtraction isn't correct unless we know the actual profit received from each of the options tacked on the TCH.
Every option that is added to a vehicle represents profit to the manufacturer. This is why the TCH is only provided with lots of options, and why Toyota tends to build "loaded" TCHs. The added profit from the options is offsetting the cost of the HSD. Toyota would have to charge a lot more for a "vanilla" hybrid Camry if they simply offered it as an option - and that would raise eyebrows for those who are looking at the true "cost" of hybridization.
However, I don't think Toyota would that - they would subsidize the cost of the hybrid components, as they did for years on the Prius. So it is far more profitable to do it the way the TCH is now produced - loaded.
#381 of 627 $5250 expected premium for hybrid
Jul 30, 2007 (1:18 pm)
-from JD Power
“High gas prices, coupled with consumers becoming more familiar with alternative powertrain technology, are definitely increasing consumer interest in hybrids and flexible fuels,” said Mike Marshall, director of automotive emerging technologies at J.D. Power and Associates. “However, the additional price premiums associated with hybrid vehicles, which can run from $3,000 to $10,000 more than a comparable non-hybrid vehicle, remain the biggest concern among consumers considering a hybrid. The AEI highlights several non-hybrid models available that help consumers reduce fuel use and emissions.”
Consumers Interested in Hybrids and Flexible Fuel Vehicles
The study, which examines consumer perceptions regarding hybrids, diesel and flexible fuel vehicles, finds that fewer than one-fourth (23%) of consumers say they will only consider a gasoline-powered model for their next new vehicle. Among consumers who expect to acquire a new vehicle within the next two years, 57 percent indicate that they are considering a hybrid vehicle, while 49 percent are considering a flexible fuel (E85 ethanol-based fuel blend) vehicle and 12 percent a diesel.
On average, consumers considering a hybrid expect to pay approximately $5,250 more for the powertrain option. Acknowledging the increased vehicle price, these consumers expect an average fuel economy improvement of 28 miles per gallon compared to a similar vehicle powered by a gasoline internal combustion engine, when in reality, hybrid owners report getting an average improvement of just 9 mpg. Consumers considering a diesel expect to pay approximately $2,800 more for the option and expect an average fuel economy improvement of 21 mpg, while diesel owners report getting a 12 mpg improvement on average. Those considering an E85 vehicle are unsure whether to expect to pay more for the option or see an improvement in fuel economy, but instead hope the use of the ethanol-based fuel blend will help reduce U.S. dependency on foreign fuels. The availability of fuel or fueling stations is the largest concern among consumers considering a flexible fuel or diesel-powered vehicle.
“One of the biggest challenges for alternative powertrains is that consumers often have unrealistic expectations for the fuel-saving abilities of these vehicles,” Marshall said. “And particularly with hybrids, actual fuel performance often doesn’t live up to the vehicle’s EPA estimate. There is a real need to educate consumers about the technology and its benefits. Managing consumer expectations and lowering the cost premium will be instrumental in accelerating acceptance.”
#382 of 627 More tax incentives for hybrids? Are they needed?
Jul 30, 2007 (1:33 pm)
Are more tax breaks for hybrids really what this country needs?
Congressman, actor Rob Lowe push for plug-in car tax breaks
And Rob Lowe is not the only one.
Sens. Maria Cantwell, D-Wash., Orrin Hatch, R-Utah, and Barack Obama, D-Ill., want to offer consumers up to $7,500 in tax credits to convert hybrids to plug-ins. Dubbed the "Fuel Reduction using Electrons to End Dependence On the Mideast Act of 2007," or the FREEDOM Act, it also would give automakers incentives to build plug-in vehicles.-end
source J.D. Power-
While actual hybrid vehicle owners tend to be older (55) than the average new-vehicle buyer and more affluent, with an average annual household income of $113,400, the study finds that consumers who indicate that they are considering a hybrid tend to be younger (averaging 43 years old), with an average annual household income of $88,500.
Do people that make >$100,000 a year really need a tax break to provide the incentive to buy a hybrid?
#383 of 627 Re: $5250 expected premium for hybrid [moparbad]
Jul 30, 2007 (1:34 pm)
It's interesting that JDP and others apparently have been able to put numbers on people's expectations. I haven't heard these figures but I find them interesting.
Unrealistic? Probably, in both directions; i.e. extra cost and fuel savings.
Here is a key concept that I keep showing. At this specific point in time it doesn't matter which option you ( the buyer ) choose. At $3/gal and 15000 mi annually both an ICE only and a hybrid of the same vehicle will cost you about the same total money over 5 yrs of driving.
The best value now is the HCH due to the $2100 tax credit at the moment. Over 5 yrs the HCH will cost significantly less to drive than a comparable EX AT Civic.
TCH vs 4c XLE Camry..the same total cost
Prius vs Matrix XR AT .. the same total cost
The only significant factor as I see it is that the hybrids offer a hedge against future fuel price increases. If fuel is $5/gal in 5 yrs the hybrids will be a clear winner.
However to minimize total transportation costs it's always better to buy a lesser vehicle, preferably a used one.
#384 of 627 Re: More tax incentives for hybrids? Are they needed? [moparbad]
Jul 30, 2007 (1:44 pm)
Do people that make >$100,000 a year really need a tax break to provide the incentive to buy a hybrid?
LOL that doesn't go very far in certain parts of the country with a family of 4, 5 or 6 after fed, state and local taxes are deducted.
$100,000 gross with an 'effective tax rate' of ~50% leaves $50,000 or about $4000 a month.
-$2500 Mortgage, taxes, interest
-$500 gas on 2 vehicles for a month
-$200 auto insurance
-$500 utilities, cable & phones
ZERO debt ( ) no car payments...
that leaves $1500 for..
Life insurance, tuition, church, spending money, dance lessons, sports uniforms, misc.
#385 of 627 thanks for clearing up one issue
Jul 30, 2007 (2:00 pm)
Thanks for pointing out that just like MPG in reality, the expectation of higher hybrid option cost is too high.
Is the diesel option on passenger cars $2800? Not usually. Just like the hybrid option for cars is nowhere near $5250.
This is a study which measured PRICE AND MPG EXPECTATIONS, not reality.
#386 of 627 Re: More tax incentives for hybrids? Are they needed? [moparbad]
Jul 30, 2007 (2:31 pm)
rhetorical question: "Do people that make >$100,000 a year really need a tax break to provide the incentive to buy a hybrid?"
1. they are taxed in a higher bracket and get to keep less of their money percentagewise,
2. they are closer to retirement (55) and therefore are most likely in SAVE SAVE SAVE mode by age 55,
3. as you enter higher income brackets, the cost to live your accustomed lifestyle goes up,
4. tax incentives for hybrids benefit the $30K family just as they do the $100K family,
5. some people (incorrectly so in my estimation but this is true nonetheless) use the tax break as a dealbreaker on what car they buy and end up buying the cleaner emission hybrid, which is good for all of us.
If tax breaks for gasoline/electric hybrid can stimulate 250,000 buyers a year, then maybe tax breaks for plug-in hybrids can stimulate even more clean car purchases.
#387 of 627 Re: More tax incentives for hybrids? Are they needed? [larsb]
Jul 30, 2007 (3:06 pm)
I don't think the purpose of these tax breaks is to reward Toyota's car dealerships and their salesmen. If it allows the dealerships to move cars at MSRP as opposed to invoice then that is exactly what's happening. If the buyer is actually getting a break its a lot smaller than he thinks. I say Toyota because they are responsible for the bulk of all hybrid sales. Making them the biggest beneficiary of this particular piece of tax legislation.
#388 of 627 Re: More tax incentives for hybrids? Are they needed? [tpe]
Jul 30, 2007 (8:42 pm)
That is exactly correct. When the tax credits got smaller the dealers had to discount the hybrids to get them off the lots. As was pointed out people that buy hybrids are mostly fat cats that do not need the tax credit and more than likely will not get it because of their tax bracket. So the only ones making out are the automakers.
I have no idea why the Hollywood set is pushing for tax credits on PHEVs. There are NONE for sale in the USA.