Hybrids – Vehicles, Battery & Hydraulic Technology

Which Hybrids Payback the Quickest

September 2012, Green Fleet Magazine - Feature

Fleets are as environmentally conscious as they’ve ever been, because they have more of an opportunity to curb larger amounts of greenhouse gases and smog-forming pollutants than the single consumer. In turn, a fleet’s costs to “go green” are even greater than those of the Prius-buying family — and, in business, any environmental initiative must be sustainable to the bottom line.

With this in mind, the lifecycle cost experts at Vincentric put together a cost-of-ownership analysis of hybrid models. Last November, Vincentric analyzed 26 models from the 2012 model-year.

The Vincentric data measures eight cost elements for more than 2,000 vehicle configurations, including depreciation, financing, fees and taxes, fuel, insurance, maintenance, opportunity cost, and repairs. Each month, Vincentric recompiles its database to take into account current market conditions.

For the hybrid analysis, Vincentric assumed 15,000 annual miles driven over five years. The hybrid report uses U.S. averages, although states can be selected for a more specific report. Fuel prices are based on a weighted average over the previous five months.

The Changing Equation
The hybrid/internal combustion engine (ICE) cost differential is an ever-changing equation. Wild swings in fuel prices are a major factor, as are available tax credits and rebates, which expired for all hybrid models on Jan. 1, 2011. New government incentives concentrate on plug-in hybrids and electric cars.

In reviewing the hybrid analyses using Vincentric data over the years, starting in the 2006 model-year, hybrids have not closed the pricing gap with their traditional ICE-powered counterparts. In this latest analysis of 26 hybrid models, Vincentric’s data shows the average price premium for a hybrid is $4,870. Mitigated by an average fuel-cost savings of $3,673 and, taking into account other costs, the average cost of ownership for hybrids is now only $854 more than the straight gasoline models.

Nonetheless, only two hybrid have a total price that is lower than their ICE cousins, which are the 2012 Lexus CT 200h and the 2012 Mercedes-Benz S-Class Hybrid.

The lists show that lifecycle costs for luxury hybrids can swing wildly when compared to their gasoline-only counterparts. Some models, such as the Mercedes-Benz S-Class Hybrid and Lexus CT 200h fare well, while others have prohibitive cost differentials.

A Hybrid Surprise
Compared to an article published by Green Fleet magazine’s sister publication, Business Fleet, on 2011 model-year hybrid cost differentials when four vehicles showed lower total costs of ownership than ICE counterparts, only one vehicle showed a savings in 2012.

Overall fuel economy differentials remains strong, with the 2012 Lincoln MKZ Hybrid showing the largest differential at $6,168 less than its ICE counterpart, followed by the 2012 Lexus CT 200h at $5,929 less.

However, the 2012 Toyota Prius remains at the top of the list when looking at overall lowest fuel costs, followed closely by the 2012 Toyota Prius C, and the 2012 Honda Civic Hybrid.

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