Hybrid thoughts

[ghini]

I did some quick math replying to Marthas journal. thought you might find it interesting:

If you go to http://www.fueleconomy.gov you can compare a regular civic with a hybrid civic.

A regular plain-vanilla Civic costs about $13,500 and has an estimated $908 a year in fuel costs. A hybrid civic costs $19,000 and has $658 in fuel costs. Both these are based on driving 15,000 miles a year.

The difference in cost is $5500. The difference in yearly gas costs is $312. At that rate, you would have to drive the Hybrid for 17.5 years before the money you save in gas is greater than they extra money you paid for a hybrid. If you drive less than 15,000 miles a year, then it's even longer. Even if gas prices double, it's still 8.75 years driving the same car. There are a lot of 9 year old Civics on the road. No one is sure if a Hybrid will last that long.

I'm sure in 20 years almost all new cars will be hybrids, or something similar. Right now they are like computers and digital cameras. Give them 3 years or so and there will probably be something new and better.

Comments

[violin.livejournal.com]

I'm not able right now, because of fatigue and busyness, to wrap my mind around how the possibbility of selling the car used changes the math, if at all. For simplicity, we could imagine that they depreciate proportionally, though it's doubtful...

I seem to be wrapping my head around it, anyway...

Lets say the value of the cars depreciate x per year. Like, if it falls 15% per year, x=0.85 Cause the numbers are better that way. If it's the same for both then the cost of ownership (in thousands) over n years would be

Cs(n) = (1 - x^n)13.5 + 0.908n for the standard civic

Ch(n) = (1 - x^n)19 + 0.658n for the hybrid.

Given a realistic estimate of x, we should be able to see when the real costs match up by equating the 2 expressions:

 (1 - x^n)13.5 + 0.908n = (1 - x^n)19 +  0.658n
-(1 - x^n)13.5  -0.658n  -(1 - x^n)13.5 -0.658n

0.25n = 5.5(1 - x^n)
/5.5   /5.5

n/22 = 1 - x^n
n/22 + x^n = 1

Sadly, at the moment I don't remember any easy way to solve that for n. But, I fed it into the solver on my HP, and if I've done everything right, x=0.9 (10% depreciation per year) gives 19 years before the real costs match up.

If you assume more aggressive depreciation, it gets worse: x=0.5 gives 22 years-- if the hybrid depreciates faster than the standard, then it loses out even more, of course.

Interestingly, if we assume 5% depreciation/yr, x=0.95, gives slightly less than 5 years. If x gets much closer to 1 (no depreciation at all) then the answers get useless very quickly-- nearly zero, since then the only cost of ownership would be gas.

Also interesting, to me, anyway, is that your answer of 17.5 years, found without thinking about depreciation, corresponds with the answer when x=0.9133-- 8.67% depreciation. So if they depreciate equally (not likely) and they depreciate faster than 8.67% then the hybrid does even worse. If they depreciate slower, the hybrid does better.

OK, back to real work...

[violin.livejournal.com]

and they depreciate faster than 8.67% then the hybrid does even worse.

....than your 17.5yr estimate


If they depreciate slower, the hybrid does better.

....than your 17.5yr estimate

[uglor.livejournal.com]

Hybrids have rechargeable batteries which in theory need to be replaced after so much time/use. They haven't been on the road long enough for anyone to really know how often they need to be replaced, or how much they will cost.

[plantyhamchuk.livejournal.com]

I was wondering about other maitenency costs with hybrids, are they more expensive?

I plan on getting a hybrid as well (eventually), once they work all the technical kinks out.

[uglor.livejournal.com]

Hybrids are a lot like normal cars. They have shocks, power steering, tires, etc. Things that wear out on any car.

That being said, hybrids also have things unlike other cars, like regenerative brakes. Like any new, high tech car parts, they are expensive. They haven't been on the road long enough for anyone to know if they are going to be more or less expensive 5 or 10 years from now.

[plantyhamchuk.livejournal.com]

*nods* The weirdest thing about a hybrid I found was actually driving one. It's like driving a really really expensive golf cart.

[angry-user.livejournal.com]

If that's your plan, you'll never have a hybrid. They are filling a gap between gas motors and fuel cell type cars. I'd just hold out for the latter.

[violin.livejournal.com]

Oh, none of that should be construed as an effort to economically justify owning a hybrid. More that these things get in my mind, and I have to address them....

While the 5 years at 5% depreciation result surprised me (and is either way off because the standard is a known quantity and will depreciate slower or because the hybrid is widely assumed to make economic sense and will depreciate slower) the fact remains that, in absence of gov't incentives, a hybrid doesn't make economic sense right now.

[plantyhamchuk.livejournal.com]

AHHHH AHHHH AHHHH numbers ahhhh!