The reality of hybrid cost effectiveness
Sure, we’ve pitted the Chevy Volt against the Toyota Prius in the past, but this time we have some real numbers. Unfortunately, the numbers don’t look good. So, if you think the Volt is set to save America, you might not want to read any further.
Since yesterday, many have compared the Nissan Leaf to the Chevy Volt. I don’t believe in such a comparison. Range anxiety is real and a vehicle like the Leaf will never resonate with the masses unless you can cut the price of the vehicle in half, minimally. The Chevy Volt, on the other hand, could easily convert the masses into plug-in vehicles, as long as the Volt is cost-effective.
Today, you can lease a Prius for $199.00 per month, while a Volt lease will soon cost $350.00.
The average Prius drivers spends $825 per year on fueling costs. The difference between Volt and Prius lease payments after a year is $1800. Consequently, even if the Volt uses nothing but free electricity, it will still cost $1000 more to lease per year. Of course, perhaps if gas prices hit $6.00 per gallon, then the Volt will be competitive, but considering higher gas prices push the cost of everything higher, will most Americans even be able to afford a new car?
But won’t the Volt cost much less to maintain than a Prius?
Certainly not on a three year lease, and since you can buy two Prius hybrids for the price of one Volt, there isn’t even a reason to compare purchasing cost-effectiveness. When it comes to purchasing, the Prius is a far better deal. Moreover, the battery pack on the Volt will probably not be as reliable, long term, as has been the much cheaper Prius battery pack.
In fact, in terms of maintenance, insurance is easily the biggest cost, and if insurance companies price Volt insurance fairly, it should cost more to insure a Volt than a Prius, a good bit more.
Today, the Volt just isn’t very cost-effective compared to the Prius, and that’s even after a $7500 tax credit that some have reported enables GM to reduce lease costs by $200 per month on the Volt’s 3 year lease option, but what happens after the tax credits expire?
While battery costs will come down, will they drop by $7500 per car in the near future? Likewise, wouldn’t such battery cost improvements also make the Prius cheaper, lighter and more fuel efficient as the king of hybrids could then switch to lithium?
And, yet, that isn’t even the most disturbing Volt news. After a decade on the market, hybrid cars still account for less than 3 percent of market share. Hybrids, such as the Prius, are just not perceived to be cost-effective by most consumers, and the Volt will even be far less cost-effective and much more expensive.