Since the advent of hybrids in America at the turn of the last decade, car buyers have been calculating the hybrid equation and asking the question: “Are they worth the premium?”
The answer is a constantly moving target, based on factors such as wildly fluctuating fuel prices, the introduction of cheaper hybrids and luxury ones, the expiration of government rebates and tax credits, and improvements in fuel economy in the internal combustion engine (ICE).
And, so Green Fleet magazine’s sister publication, Business Fleet, circled back with the lifecycle cost experts at Vincentric for an updated analysis to answer the question today.
Vincentric uses data specific to fleet, including capitalized costs that reflect a fleet acquisition price with fleet incentives.
Based on Vincentric’s November 2012 update, this analysis pulls data on 36 models (and 12 trim levels within those models) from the 2012 and 2013 model-years.
A look at a majority of those vehicles can be seen on the next page in the table, “2012-2013 Hybrid Vehicles vs. All-Gasoline Powered Counterparts.”
First, let’s look at the data in aggregate of hybrid models compared to their traditional ICE counterparts.
Understand that making an apples-to-apples comparison of hybrids to ICE models, and comparing the data historically, is not an exact science. Initial costs for hybrids are still substantially more than ICE models, on average $5,285 more. However, that figure is shrinking — in an analysis based on October 2011 data, the initial cost average differential was $8,494.
Looking at depreciation in this analysis, the average difference between hybrids and ICE models over five years is $4,308. Hybrids depreciate less quickly; hence, some of hybrids’ initial cost premium will be recouped upon resale.
When factoring in fuel economy, in this analysis hybrids save an average of $4,597 in five years over ICE models, further shrinking the overall cost differential. When factoring in total cost, however, hybrids still end up costing more than ICE vehicles — by an average of $1,582.
This gap is slightly more than the gap in the October 2011 analysis, noting, again, the many factors affecting this differential.
Eyeing the Models
Looking closely, a number of individual hybrid models beat their ICE siblings (or close cousins) in total-cost comparisons. That list includes the Toyota Avalon, Toyota Camry, Porsche Cayenne SUV, Porsche Panamera sedan, KIA Optima, Acura ILX sedan, Lincoln MKZ, Lexus HS 250h and ES 350 sedans, Lexus RX 450h, Mercedes-Benz S400 HV, and a few other models.
As in the previous analysis, the Lincoln MKZ hybrid has the best total cost differential of any hybrid in the group, a full $6,402 over its ICE counterpart. The big reason: Lincoln matched pricing for the ICE and hybrid version. The only other model with a lower initial cost than its close cousin is the Mercedes S400 HV.
The other hybrid models with better total costs all start with higher initial costs, but make up the difference in fuel savings and value retention.
Interestingly, two hybrids with no comparable ICE model — the 2012-MY Toyota Prius C Two and 2013-MY Honda Insight — rank first and second in lowest total costs of ownership of any vehicle in this survey. The gasoline-powered 2012-MY Toyota Yaris is third.