Monday, April 20, 2009

"Saving Money" With Hybrids? Who's Kidding Who?

This little piece from the Washington Post got me started:

President Obama convened his Cabinet for the first time today and instructed department heads to trim their budgets by a combined $100 million over the next 90 days.

The statement identified a variety of cost-cutting measures it said agencies have already begun to implement, ranging from a crackdown on improper farm subsidy payments by the Agriculture Department to bulk purchases of office supplies by the Homeland Security Department and the use of energy-efficient vehicles.

Hmm. Well, should these brave moves manage to save $100 million dollars of taxpayer monies, be aware that that partciular figure is the equivalent of a man making $50K a year porudly announcing he has figured out a way to save $1.67/year from his expenses.

But it ain't gonna happen, especially if you're trying to sell me the "hybrids save money" routine. Because they don't. And I am gonna explain why.

Ford Escape (standard) 22 MPG City/28 MPG Highway MSRP $20,435-
Ford Escape (hybrid) 34 MPG City/31 MPG Highway MSRP $29,645-

Lets go with a baseline figure of 12,000 miles a year (1K/month, like a standard lease) to figure out the "savings". And we'll will take the higher spread of City miles (12 MPG better w/hybrid) to do the math.

12000 miles at 22 MPG = 545 gallons consumed/year
12000 miles at 31 MPG = 353 gallons consumed/year
Hybrid advantage - 192 gallons less/year

Great! So how much do we save? Gas in New Jersey is now $1.81 for 87 octane, let's use $2- as a figure here. How much money to we save a year using a hybrid?

192 x 2 = $384 saved

And the time it would take to recoup the extra $9,000 you spent to get a hybrid?

$384/$9,000 = 23 years

Let's assume the price of gas goes up to $3-/gallon, a 50% increase from today:

192 x 3 =$576 saved
$576/$9,000 = 15-16 years

Unlikely the government is going to go thru the cost and expense to maintain a vehicle over 16 years just to see its initial investment in alleged fuel economy recouped. These days, you're lucky to get over 10 years on an American car, which is the kind the government is mandating itself to buy.

So how does this save money? It doesn't, unless you look strictly at fuel pricing on an annual basis, and not the extra $9-$10K you spent to get there. More creative accounting by the Obama team, to sell you on an ideological product.

Actually, speaking of ideological product, there is one way you can make the initial cost of hybrids more appealing - by taxing the sh*t out of gasoline:

192 x $6 = $1,152- saved
$1,152/$9000 = 7.5 years.

Don't think for a moment Obama hasn't discussed this with Nancy, Henry, and Harry....

No comments: