Edmunds’ Study Attacks Hybrids’ Cost

Recently, car site Edmunds.com released a report, picked up in USA Today and the Washington Times claiming that most hybrid vehicles are not cost-effective for their owners. Edmunds announced that only the Toyota Prius would prove cost-effective over five years of normal driving.  For the rest, they said, gas would have to increase above its current price, or people would have to drive the vehicles much more every year.

Now, I’m all for keeping a skeptical eye on the hybrid market—that helps drive it to be the best it can be.  But my intrepid boss, David Friedman, responded with a Letter to the Editor to both papers pointing out some of the unfair biases in the Edmunds study.  Unlike USA Today, I’m glad to say that the Washington Times did print David’s response, which notes that:

Edmunds.com analysis misrepresents the amount of time people spend driving in congestion, where hybrids give you the best bang for the buck. By assuming only one-third of your driving is in the city, the numbers underestimate fuel savings. Data from the Environmental Protection Agency shows that people spend about 62 percent of their miles in the city, nearly twice as much as Edmunds.com assumes. On top of that, the electric motor takes over some of the braking duty from your brake pads, saving you money on replacements.

In addition to the points raised by David, it turns out that the Edmunds study assumed that some hybrids will depreciate faster than conventional counterparts.  Does this seem like a good assumption when we’re hearing reports about used Priuses (Prii?) selling for more than new ones? Assuming equal depreciation rates would also make the comparison more reasonable.

Interestingly, a similar study in Canada, determined that almost all current hybrid models are in fact cost-effective for buyers.

So who’s right? UCS will be conducting its own assessment of the economics of owning a hybrid vehicle.  But one thing that none of these analyses has considered are the many other reasons that people have for buying hybrids, including a desire to help reduce their impact on the environment or increase U.S. oil security, or any of the many incentives offered at the state or local level.  Big picture folks, big picture…

Posted by: Don

Comments

[Jim (I Love Hybrid Cars!) Stockton]

Here's my take on this:
I bought a Honda Civic Hybrid a year ago. Since then, I have spent about a third of what I used to spend on gas. That, along with the tax credit I got back at the end of last year, has made my hybrid car purchase very worthwhile and economical. It's sad to see that this technology isn't backed a little better by our government. We REALLY need more support and mandates in order to clear up our air. It's OUR future!