A few very successful petrol/electric hybrid cars have been successfully launched in recent years. The Toyota Prius is the most well-known example. However, it is not clear that they are being sold at a profit. What conditions are needed for “the typical motorist” to find this type of car a better buy than an ordinary petrol or diesel engined car?

Any kind of feedback or information would be appreciated greatly.

If you would like to email your response or discuss this question with me feel free to at 03142992@brookes.ac.uk

Kind regards

The cost of energy, especially gasoline has to be a lot higher, especially in regards to all the externalities imposed on the public in general because of it's use, such as the recent huge cost of multiple theater wars to guarantee future access to oil for US corporations. If that ever changes, and the burden of the externalities is shifted away from the entire public and onto (proportionally in terms of consumption) the purchasers of gasoline and diesel, hybrids would be in even greater demand than they are now (with the long wait lists).

Government incentives and manufacturers selling them at a loss is only necessary when the cost of fuel is kept artificially low, it may "help" by keeping consumption in check, and therefore the economy can continue to grow without significant increases in overall consumption, but in the long run that strategy backfires because it fails to address the problem, namely our civilization's crack habit.

On another note, Toyota announced quite a while ago (before the second generation North American Prius was made) that they were selling the Prius at a profit, and by now there have been further reductions in cost and more expensive options that bring in more profit per vehicle. I don't know how the other models are doing, profit wise, but no other vehicle comes close to the sales volume of the Prius.

2001 Prius Photos       2005 Prius Photos
'97 Prius Simulation Prius inner workings

There is a CNN article about the history of Prius that ". . . Japan lost money on the first batch--not unusual for a small car. . . ." Since then, the demand has exceeded the supply and they are making money.

Last year, the local Toyota dealer put me on a 6-month waiting list to let me pay $3,500 over retail price for the next Prius. They called me six weeks later and said,"We have one coming in next week and the first customer who come in with $1,000 cash . . ."

Let me suggest you repeat the experiment with your local Toyota dealer. Don't take my word for it, see if you can get a discount price under the Toyota suggested retail price for a Prius. Do you honestly believe Toyota today is selling Prius at a loss?

In 2001, we looked at the Prius and the Echo and based upon the price of gas and purchase price, bought the Echo. In 2005, we had to replace our 91, manual transmission, Camry and we bought an 03 Prius with 49,300 miles for $17,300 . . . and laughed all the way to the bank.

The average US cars gets ~24 MPG but I'm getting over 48 MPG and drive about 1,000 miles per month. Do the math with your local gasoline prices. But it looks like I'll pay off the hybrid premium in less than a year (not much of premium on a used car that gets NO government incentive.)

Owning a Prius, I've come to realize the real advantage is a completely drive-by-wire car. Ordinary cars, gas or diesel, could have a significant MPG improvement IF they also were fully drive-by-wire. But they are burdened by energy wasting brakes and simple but inefficient control systems. My hybrid electric has one latent but not fully exploited advantage over gas and desel vehicles . . . the ability to plug-in to the grid.

Recently, I did a cost per BTU analysis of gasoline, natural gas and electricity only to discover electricity is a significantly better buy in the Tennesse valley. Given the relatively high efficiency of battery storage, a 'plug-in' Prius may be in our future. My Scotish and Welsh heritage demands it.

BTW, please do not construe this as any slight of the Honda or Ford hybrid electrics. They are excellent vehicles in their own right. The Hondas have fewer hybrid parts and the Ford Escape a much larger and spacious vehicle. One should choose a vehicle based upon their individual requirements. For our family, a used, 03 Prius was the optimum solution.

Bob Wilson

Operation Iraqi Oil Freedom:

Automatic, stock, project car.

My other 1500 cc car:

Automatic, stock, backup car.
Free speech, dialog and knowledge thrives without the poison of SPAM.

Going to a yota dealer in this area is like date rape drug. You leave sawgering away rubbing your arse And wondering if you should go to a hospital and have rape kit ran on your wallet. And seek mental health care after the we are greater than god massive asult you just went thru. And thats after the goverment aid in tax return. Dive 50 miles north and get a HCHII for 1500 under msrp.

I think the tax break should be done away with for energy savings in cars, heating a cooling. You think its right so be it. I think its bs. I have no room for tax welfare nor corp. welfare from the goverment. Produce,, do the right thing and move on.

Just do the right thing. If that means refrubing a HX Civic or bringing a old festiva or Geo metro back to life so be it. Or converting your home to power compact lighting or geo thermal so be it. But why should the mass's pay for another noble journy into it. For every person that takes a tax break. Somebody else has to make up for it.

I dont mean for this to sound like anti Hybrid rant as i love the tech. behind them. but to sub. them out... come on.

That is why I advocate going to Ebay or equivalent internet based markets. I bought my 03 Prius from Ft. Worth Texas and this weekend, someone from California took delivery of their hybrid-electic in Fairfax VA and started driving home.

My rule of thumb is let the local folks have a chance to 'do the right thing.' If they can't, no fault, no foul, but do the right thing anyway.

Personally, I think we should have locked Cafe standards to the average price of gas. It would be automatic and would have gotten GM off of the 'government tit.'

Bob Wilson

Operation Iraqi Oil Freedom:

Automatic, stock, project car.

My other 1500 cc car:

Automatic, stock, backup car.
Free speech, dialog and knowledge thrives without the poison of SPAM.

Yes, I do think they can compete just fine.
But I think they would do alot better without the media's constant parade of the -few- truly unhappy owners and idiot articles like:

"A/C use taxes hybrid MPG"
or
"Driving style effects hybrid MPG"

Seemingly hybrid specific.

When I bought mine back in Jan'04 the real negativity wasn't in full force yet.
Everyone I knew in the automotive hobby warned me that hybrid technology "Isn't quite there yet".

I've read countless articles of MPG's lowest side, and many of its average.
But I have never-ever, even once read an article which even slightly hints to these cars MPG potential.

After all, the very tiny few who gets even close to EPA struggles a terribly impossible fight to do so....... right?
Without the effort of grunting, blood, sweat & tears one can expect terribly dissappointing low mpg....right? (Kidding of course)

Efficient drivers do it better.
1003 miles a tank personal record. 74MPG calculated. HCH1 CVT

Auto makers that don't make a profit aren't auto makers for very long. I think all the noise that they're selling these cars at a loss is propoganda designed to make the buyer feel like they're getting steal at $3000 over MSRP. My Honda salesperson told me the 2003 Civic Hybrid costs something like $40,000 to make - what a bargain I was getting at $21,000! Yeah, right.

Honda, Ford and Toyota aren't in this to make themselves feel good. They're in it to make money. They've had six years since the introduction of the Insight, and close to that with the Prius I. They've had enough time now to know if they can make these cars and make money. If it was truly unprofitable, they would have abandoned it years ago. At the very worst, they're breaking even but see such an upside in the future they'll stay the course.

*** Retired after 65,000 outstanding miles ***

Maybe GM is trying to blame their financial loss on their joke hybrid?

Bob Wilson

Operation Iraqi Oil Freedom:

Automatic, stock, project car.

My other 1500 cc car:

Automatic, stock, backup car.
Free speech, dialog and knowledge thrives without the poison of SPAM.

Lol.

Yes, GM will save itself from bankruptcy by sinking a bunch of R&D money into a low-rate production "no profit" vehicle.

Anyone want to bet the 'no profit' nonsense has been brought to you by Texaco? When Honda/Toyota/Ford step up and close down hybrid production then I'll believe something.

*** Retired after 65,000 outstanding miles ***

Auto companies won't use a loss leader to enhance their image? Lets go back to 4 wheel steer Honda's. Talk about a waste but they got huge positive press for doing it and then it just faded away. The auto industry has never made squat selling small cars. Do you think Toyota is more interested in hybrids or taking over the sales of big pick up trucks?

We blame America for building big vehicles? In perspective who has made the biggest jump from small cars to big cars? Would have to be Toyota or Honda. Why do you think they are doing it? Because thats where the profit is. Why do you think they are selling hybrids in luxury vehicles? Because they can add on lots of extra's to recoup the losses from the expense of the hybrid technology.

Think I'm wrong? Why don't they sell Hybrid bare bones Echo's? Could it be because the hybrid portion of the vehicle isn't profitable for the MFGR just as it isn't cost effective for the consumer?
How many hybrids would be sold if you subtracted sales to government agencies and politicians who are trying to be politically correct?
I respect Hybrid owners for making a social statement about our wasteful energy useage but from an economic standpoint they aren't practical. Subsidy saves a lot more fuel if comperable funding is spent on mass transit