Industry News
US gasoline prices begin to offset hybrids’ price disadvantage – Edmunds.com
23rd August 2006
Gasoline-electric hybrid cars and trucks cost between US$1,200 and US$7,000 more than traditional versions of the same vehicles, according to the automotive consumer website www.Edmunds.com, but a fuel economy study by Edmunds.com showed that the scales were starting to tip in favour of hybrids. "High gas prices and generous tax credits now offset the high sales prices of some hybrids, assuming owners keep their hybrids for a few years," said Alex Rosten, an analyst with Edmunds.com.
Assuming vehicles were driven 15,000 miles per year and gas was priced at US$3 per gallon, owners of the Toyota Prius and Ford's Escape Hybrid would break even within three years. Buyers of the GM’s Saturn Vue Green Line, the Toyota Camry and the Honda Civic Hybrid would break even within six years, according to Edmunds.com’s calculations.
Consumer Reports research last April found that, even with federal tax credits, the fuel savings from current hybrids did not offset their additional cost versus similar gasoline-fuelled vehicles in most cases over the first five years and 75,000 miles of ownership.
Federal tax credits for hybrid buyers are being phased out on the most popular models; buyers of a Toyota hybrid from 1 October will only qualify for half of the tax credit for which they would have previously qualified. Tax incentives will also be cut on other hybrids after manufacturers sell 60,000 of the vehicles - a threshold Toyota has reached. The tax credit on Toyota and Lexus hybrids is scheduled to drop to 25% in April 2007 and then be eliminated in October 2007.
- CSM Worldwide this week issued a study report on 6-speed transmissions citing higher gasoline prices as one factor driving growth in their penetration, to a forecast 60% of the US car and truck market by 2012, up from less than 5% today.
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