[For complete article with chart on 14 hybrid models including the RX400h, go to WSJ.com]

Pricier Gasoline
Makes Hybrids
A Better Deal
Increased Fuel Savings Mean
Quicker Payback on Vehicles
That Command a Premium
By JOSEE VALCOURT
Wall Street Journal June 12, 2008; Page D1

The Toyota Prius, the country's top-selling hybrid car, sells for an average $22,939, compared to $19,231 charged for its gas-powered cousin, the Camry. But the Prius also drinks less gasoline -- which now tops the $4-a-gallon mark.

Herein lies the consumer conundrum. Which is the better deal: The more expensive car that is cheaper to operate, or the less-expensive car that drinks more gasoline?

Toyota Prius
It's the Toyota Prius -- but only if the buyer keeps the car for longer than three years, according to Edmunds.com, a Web site with resources for car buyers. In the Prius vs. Camry example, it takes three years for the hybrid's fuel savings to pay back the premium paid to buy the Prius instead of a comparable gas-powered car.

The Prius example comes from the latest study released by Edmunds that determines the length of time it takes to recoup the premium paid on costlier hybrids. The findings: The rising price of gas is making hybrids more financially attractive by reducing the amount of time required for fuel savings to pay back the so-called hybrid premium on many models.

In addition to the Prius, analysts found that the Nissan Altima, General Motors Corp. Yukon, Toyota Camry and the Mercury Mariner were among hybrid vehicles that offered relatively quick paybacks.

Of course, many consumers seek hybrids for environmental reasons that, to them, outweigh the sticker price. But strictly from a cost standpoint, the hybrid isn't always the best bet. Some models still have such big price premiums or modest mileage improvements that buyers ought to think carefully before buying. These include the hybrid versions of the Toyota Highlander, Chevrolet Malibu, Saturn Aura and the ultra-luxury Lexus LS600H.

Saturn Aura
"There are really only a handful of hybrids that may be good financial propositions for most consumers right now, and the Prius is one of them," said Jesse Toprak, executive director of industry analysis for Edmunds.com.

Edmunds' calculations focused on the cars' sticker prices -- comparing the amount paid for a hybrid model over a gas-engine version of the same model, if available. Then analysts factored in rebate offers on the vehicles, the gas mileage in both city and highway driving and, of course, the price of fuel, which averages $4.02 a gallon, according to the latest AAA figures. Also included in the calculations were federal tax credits, which can reach up to $3,000. The calculations do not account for differences in costs for repairs and replacement parts, for example; nor do they factor in varying costs to insure vehicles.

Even so, the hybrid option is a better proposition with regard to payback than when gas cost $2 and $3 a gallon, said George Pipas, sales analyst for Ford Motor Co.

Driving Up Sales

PAYBACK TIME


Hybrid models that took the shortest amount of time for fuel savings to offset the premium paid for the car:
• Toyota Prius
• Nissan Altima
• GMC Yukon
Hybrid models that took the longest time to break even:
• Lexus LS600H
• Saturn Aura
• Toyota Highlander
Source: Edmunds.comThat should help drive sales in the same way it has helped drive sales of small cars. "It was always the case that as economics made it more favorable, that demand would grow and go beyond those that were just curious or early adopters," Mr. Pipas said.

Consumers, Mr. Pipas said, need to evaluate their needs. They may find that a fuel-efficient, four-cylinder car may be a better route. "With a higher price of gasoline, it becomes a better proposition for the consumer depending on the kind of driving they do," he said. "That is one of the big things that is hardly ever mentioned. What kind of driving does the consumer do."

Martin Ball of Yonkers, N.Y., is looking to trade in his Jeep Commander SUV and buy something that gets better gas mileage. Among the cars on his shopping list are the Nissan Altima hybrid sedan and the Lexus RX400H, also a hybrid.

Mr. Ball, whose wife also drives an SUV, is leaning toward the Altima, partly because he finds it aesthetically appealing.

Mercury Mariner
"We're looking to get away from having two SUVs because of gas prices," Mr. Ball said. "We're thinking of keeping her SUV and having a car. I'm considering the Nissan Altima because of the way it looks and its price. It still looks like a car, and it gets good gas mileage."

The Nissan Altima hybrid paints a tempting picture, offering a payback in nearly four years. Buy an Altima hybrid and you get a $2,350 tax credit, which lowers the typical price premium on the hybrid compared to the standard Altima to $1,879, according to Edmunds. The hybrid gets 35/33 mpg in city/highway driving, better than the 23/31 for the gas version, for a savings of $499 if driven 15,000 miles per year.

A few models were in the five-year range of offering a payback of the premium on the hybrid version.

With a GMC Yukon, the gasoline-engine model gets an average 15.2 mpg, while the hybrid gets 21.5 mpg. That means the hybrid offers a fuel savings of $1,170 annually. So in the end, it takes nearly five years to pay off the premium paid for the hybrid model, according to the Edmunds analysis. The Mercury Mariner, a compact SUV, and the Toyota Camry sedan deliver paybacks after slightly more than five years.


Honda
Honda Civic Hybrid dashboard
In the six-year payback range is the Ford Escape, also a small SUV. The Honda Civic takes 6.1 years to recoup the premium on the hybrid version, according to Edmunds, but in this case the comparison was made to a vehicle with more features and options.

Awaiting the Payback

Other hybrids are hurt by either hefty price premiums or tiny gains in gas mileage. The hybrid versions of the Chevrolet Tahoe and Toyota Highlander SUVs are so much more expensive than regular versions that you'd have to drive them almost 14 years and 18 years, respectively, to see a payback.

The Chevy Malibu and Saturn Aura hybrids face tough comparisons because the standard versions are so good on gas. The regular, four-cylinder gas models get 30 mpg on the highway. The hybrids get just two miles per gallon more, so car buyers are probably better off steering away from them.

The Lexus LS600H tops the chart among hybrids with a payback drag. The average market value is $102,423 compared to the LS460L, which averages $83,565, according to Edmunds.com. It could take an LS600H driver almost a century to break even.

they looked at the 600hl? what can i say

Why did they look at only fuel costs? What about the cheaper maintenance costs of the Prius and other hybrids vs non-hybrids?

Looking at only fuel costs is narrow-minded to say the least.

forgot to mention hybrids hold their value a lot better than most regular cars

That's like comparing the M3 to the 335i.

Gas mileage is one thing. The big picture is more important.

People will tell you that the 600h isn't meant for economy, it's meant for power but then I have to ask why isn't it any faster than the non hybrid?

Did that article take into consideration the opportunity cost of that money spent? If it was invested elsewhere? The cost of replacing the batteries? If it didn't take those into consideration then you can bet that 98 year figure would actually become a 'will never pay for itself', instead.

Lexus needed a halo car to stack up against the A8W12/S600/760i and what's the best way to be different? For Lexus it's the hybrid technology and that's pretty much why the LS600hL was borned. Take both LS600hL's acceleration and FE and compare them with the competitors then you'll realize its advantage. To have the LS600hL in the same study as the Prius because they are all hybrids is like racing a F1 car with Charger SRT8 because they all have 4 wheels and V8s.

Those who think they are saving the planet by driving a LS600hL are crazy...

Why did they look at only fuel costs? What about the cheaper maintenance costs of the Prius and other hybrids vs non-hybrids?

Looking at only fuel costs is narrow-minded to say the least.

I wasn't aware that a hybrid cost less to maintain than a similar non-hybrid. Please explain.

According to Edmunds, the Camry Hybrid has higher projected 5-year maintenance costs than a Camry 4 cylinder LE:

2009 Camry LE 4 cyl. auto = $4,232

2009 Camry Hybrid = $4,588

Hybrids have all the same parts as their non-hybrid counterparts, plus tons more... and of course more parts = more things that can break... plus I'm sure more expected maintenance... battery replacement at 150k miles, at the very least. There's no way their maintenance/repair costs are lower overall.

Did that article take into consideration the opportunity cost of that money spent? If it was invested elsewhere? The cost of replacing the batteries? If it didn't take those into consideration then you can bet that 98 year figure would actually become a 'will never pay for itself', instead.

I agree. And with cars, it's not really opportunity cost, but additional financing cost, as most people who buy get a car loan.

These kind of articles neglect to mention what is probably the most important component of the hybrid vs. non-hybrid buying decision, which is the type of driving.

For example, if you do a lot of highway driving (like me), there's no point in buying a Camry Hybrid. However, if you do a lot of city driving, the Camry Hybrid is definitely worth a look.

they looked at the 600hl? what can i say

Exactly. Who buys the 600h to 'break even' on the premium? Does that include the added cost of AWD? The extra features? The added torque? Etc.

True if they get a loan... though as the loan is paid off that initial equity (Whether retained or depreciated) becomes an opportunity cost.

These kind of articles neglect to mention what is probably the most important component of the hybrid vs. non-hybrid buying decision, which is the type of driving.

For example, if you do a lot of highway driving (like me), there's no point in buying a Camry Hybrid. However, if you do a lot of city driving, the Camry Hybrid is definitely worth a look.

Yep... I think I'd benefit less than a lot of people not because I do a whole lot of highway driving but because I'm a much more conscious driver than most people in regards up minimizing the use of my brakes. I'm currently averaging 26 mpg in our 4runner with city driving simply by coasting to red lights and not tail gating people so badly that I have to touch my brakes whenever somebody touches theirs or goes to make a turn or whatever.

People will tell you that the 600h isn't meant for economy, it's meant for power but then I have to ask why isn't it any faster than the non hybrid?

Did that article take into consideration the opportunity cost of that money spent? If it was invested elsewhere? The cost of replacing the batteries? If it didn't take those into consideration then you can bet that 98 year figure would actually become a 'will never pay for itself', instead.

then i am sure you have no experience on
1) the pick up power of 600hl at high speed over 460l
2) the quietness of 600hl over 460l
3) the smoothness of 600hl over 460l

do you see 760i significantly faster than 750i? how about the s600 over the s63? from 0-60 i am guessing not much difference, but way to go from 80 to 100+? and how smooth and effortless the s600 is?

Its amazing how people take all this time to hate/detract from hybrids and they don't look at the whole picture, just their hazy picture where hybrids suck.

I don't recall ONE THREAD by anyone who bought a Leuxs hybrid bought it b/c it was going to be CHEAPER. THey bought it to save some gas and b/c it makes them feel good.

JOSEE VALCOURT should eat a hybrid battery for this article.

I am sure if the Germans came with these hybrids first, everyone would think they are man's gift from God himself.

Its amazing how people take all this time to hate/detract from hybrids and they don't look at the whole picture, just their hazy picture where hybrids suck.

I don't recall ONE THREAD by anyone who bought a Leuxs hybrid bought it b/c it was going to be CHEAPER. THey bought it to save some gas and b/c it makes them feel good.

JOSEE VALCOURT should eat a hybrid battery for this article.

I am sure if the Germans came with these hybrids first, everyone would think they are man's gift from God himself.

Well said. Especially the point on the Germans ... if it were, say, an m3h (as in m3 hybrid) everyone would be on about how AMAZING it is and asking why everyone else isn't doing it

People will tell you that the 600h isn't meant for economy, it's meant for power but then I have to ask why isn't it any faster than the non hybrid?

Did that article take into consideration the opportunity cost of that money spent? If it was invested elsewhere? The cost of replacing the batteries? If it didn't take those into consideration then you can bet that 98 year figure would actually become a 'will never pay for itself', instead.


its faster because some people get to drive in the car pool lane because its a hybrid
lol

Hybrids have all the same parts as their non-hybrid counterparts, plus tons more... and of course more parts = more things that can break... plus I'm sure more expected maintenance... battery replacement at 150k miles, at the very least. There's no way their maintenance/repair costs are lower overall.

Batteries don't need to be replaced at 150k, and the lower maintenance comes from things like brake pads and oil changes

I wasn't aware that a hybrid cost less to maintain than a similar non-hybrid. Please explain.

According to Edmunds, the Camry Hybrid has higher projected 5-year maintenance costs than a Camry 4 cylinder LE:

2009 Camry LE 4 cyl. auto = $4,232

2009 Camry Hybrid = $4,588

Search is a great tool:

A CL thread from a few months ago:
http://www.clublexus.com/forums/showthread.php?t=329636&highlight=hybrids+save+money+after+five+years

Also a very relevant quote from the article:

“The most common argument against hybrids is that they take too long to justify their higher purchase price,” added Bell. “But this is only true if you just look at relative fuel costs. When you add in other factors, such as maintenance, repairs, and resale value, which are also part of IntelliChoice.com’s Total Cost of Ownership formula, hybrids provide great value. In other words, today’s automakers are delivering high-quality and durable vehicles that also happen to reward with improved gas mileage and fewer emissions.”


I have no idea where Edmunds got their numbers from, but on resale value ALONE you will save thousands on a Camry Hybrid over several years compared to a regular Camry.

A hybrid replaces many items that are typically mechanical with electrical equivalents. Any knowledgeable engineer will tell you electrical systems are inherently more reliable than mechanical systems.

Aside from the resale value and savings on brake costs, hybrids like the Prius have electric steering and electric A/C systems. Those not only help fuel economy, they save you money as less maintenance is required compared to mechanical systems.

Hybrids have all the same parts as their non-hybrid counterparts, plus tons more... and of course more parts = more things that can break... plus I'm sure more expected maintenance... battery replacement at 150k miles, at the very least. There's no way their maintenance/repair costs are lower overall.

Incorrect. Hybrids replace many conventional parts (mechanical parts) with electrical parts. While hybrids overall may have more parts or appear more complex to the average joe, from a reliability standpoint hybrids are better. The engine runs only sometimes, reducing wear and tear on the engine itself and other related powertrain components. Hybrid maintenance will only get cheaper in the years to come as economies of scale reduce prices for many hybrid components.

As for battery replacement at 150K, where exactly did you get that number from may I ask? Since the Prius launched over a decade ago, Toyota has yet to replace any batteries due to regular wear and tear. There are Prius taxis out there with over 300,000 miles on them still running and using the original battery. One of those taxis Toyota acquired, took apart, and studied for development reasons. Toyota found the battery was still functional after over 300,000 miles.

People will tell you that the 600h isn't meant for economy, it's meant for power but then I have to ask why isn't it any faster than the non hybrid?

A 600h is faster than a regular LS460 at passing, particularly highway passing.

They still dont understand the purpose of LS 600h....
You must compare it to comparable vehicles...eg. V10 or even V12 cars

Are they assuming the price of fuel stays at 4.02 for the next 5 years? What a dream that would be...

I guess 98.5 years is worse than infinity?

I agree with both sides of this argument:

- Those who are buying hybrids due to the current gas panic are stupid. They are responding emotionally rather than rationally, because the economic case (as this article points out) is rather weak.

- Those who look at hybrids (particularly ones like the GS450h or the LS600hL) solely from a fuel economy standpoint are missing the point.

And I guess both points are related. Hybrids do have the potential to help but are hardly going to break our dependence on gasoline. Diesels and microcars like the Smart also help, but don't fundamentally alter anything. Even plug-ins and hydrogen fuel cell cars don't really, because the underlying energy that gets them going is based on fossil fuels eventually. We need to revolutionize the way we get energy and (as I said in another thread awhile back) the way to do that is through nuclear fusion.

Search is a great tool:

A CL thread from a few months ago:
http://www.clublexus.com/forums/showthread.php?t=329636&highlight=hybrids+save+money+after+five+years


lol. Reading is a great ability. That article says nothing about how hybrids cost less to maintain than a non-hybrid.

Nice try. But please find some actual data on hybrid vs. non-hybrid maintenance costs. That article mentions overall costs of ownership, and does not state how hybrids do vs. non-hybrids specifically in terms of maintenance.

lol. Reading is a great ability. That article says nothing about how hybrids cost less to maintain than a non-hybrid.

Nice try. But please find some actual data on hybrid vs. non-hybrid maintenance costs. That article mentions overall costs of ownership, and does not state how hybrids do vs. non-hybrids specifically in terms of maintenance.

Please post where you got the Edmunds data from, as I want to see where they came up with those numbers.

Maintenance costs are just one factor that makes hybrids save you money. As shown in the linked thread, other factors like resale value DO make hybrids cheaper vs. equivalent non-hybrid counterparts.

You can go onto priuschat.com and see the various Prius owners talk about how cheap their brake maintenance costs are, and how long the brakes actually last thanks to the regenerative braking system.

Maintenance and repairs are factored into the Intellichoice data, so its only logical that they would be cheaper vs non-hybrid equivalents.

I don't have all the data put together, but it's out there if you wish to browse it. You can also look around and see how much (and how often) people are spending on Prius oil changes, how much people spend on Prius A/C repairs or on Prius steering repairs. You can also look around and see how much people are spending on engine and transmission repairs.

It makes no sense as to why non-hybrid cars would cost less to repair than their hybrid equivalents, all other factors excluded.

Gas mileage is one thing. The big picture is more important.

Its amazing how people take all this time to hate/detract from hybrids and they don't look at the whole picture, just their hazy picture where hybrids suck.

What is this big/whole picture?

I am sure if the Germans came with these hybrids first, everyone would think they are man's gift from God himself.

There's no need, they've had highly efficient diesels for decades.

just when you broke even on gas........ oops. your $3000 battery broke.
damn. one step forward, 2 steps back.

What is this big/whole picture?

There's no need, they've had highly efficient diesels for decades.

Just wait till the S400 hybrid comes out, we'll see. :eek2:

The BIG picture is that the 600h is a more powerful version of the LS, which adds AWD, the highest trim levels ever offered of the car, LED headlights, driver infrared monitoring, etc. :cool: That it is a hybrid is the cherry on top (if you like cherries, that is--smaller trunk space included ;))--basically, it is more power with less guilt (75% less emissions than competitors and slightly better fuel economy than the 460 L).

If Lexus was making a pure efficiency hybrid we'd see something like an LS 350h with higher mpg, lighter interior fittings, etc. The LS 600h L is the heaviest LS ever IIRC and so it does not actually beat out the V12 competition but it does give similar horsepower and torque, plus the aforementioned features.

But lampooning the LSh and using it to paint all hybrids with a broad brush is doing a disservice both to efficiency-focused hybrids, the concept of Lexus hybrids, and the LSh which is in a (take it or leave it) category to itself.

In the same spirit, asking about "breaking even" on the LS 600h is like asking if solar panels on your mansion would lower the electricity bill. Yeah, sure it could reduce the bill, but the place is already gnormous to begin with, and no owner at that level is expecting the added tech to pay for itself.

Big picture? Hybrids are a unique technology, and CR has said that the Prius and Civic hybrid, IIRC, do pay for themselves after several years or so of driving. Other hybrids, not so much. And for some (LSh, GSh etc.), that is not the point. That is the big picture as I see it. :p

I guess 98.5 years is worse than infinity?

No it's better. Infiniti doesn't make a hybrid. :p

People that choose a LS600HL over the base model are not concerned with MPG lol. They buy the car because it has more features, looks better and that "600HL" on the trunk gives you some added status points.

just when you broke even on gas........ oops. your $3000 battery broke.
damn. one step forward, 2 steps back.

factory 10 year 100k mile warranty on hybrid components, there are several prius's used as taxis that have 250k miles with no hybrid component failures. Next

A few things i think need to be pointed out here. The LS600Hl is a little faster than the LS460L. The best o-60 ive seen for the 40 was 5.7 and the 6oohl i ve seen 5.4 o-60. Also if they look at the additional features that are unique the hybrid like LED headlights, AWD, leather dash and additional wood trim it will shrink the difference in cost. Plus they used the market value price not the actual price of the LS460L.

A few things i think need to be pointed out here. The LS600Hl is a little faster than the LS460L. The best o-60 ive seen for the 40 was 5.7 and the 6oohl i ve seen 5.4 o-60. Also if they look at the additional features that are unique the hybrid like LED headlights, AWD, leather dash and additional wood trim it will shrink the difference in cost. Plus they used the market value price not the actual price of the LS460L.
looking at the best numbers seen so far doesn't mean anything, road conditions and other crap can make up the difference. if i really have to compare 0-60, i just go with factory numbers, which i believe are very similar between both. but then comparing 0-60 between 460 and 600 is pretty stupid to begin with

83k for avg ls460l sounds about right i say. a lot of them are tagged 80k, some 87k, and we have some 95k version

regarding the batteries for hybrid, while i also share some concern in their reliabilities, but i do have a question for those who put down on hybrid coz' of the battery replacements. are there any study or official numbers on the battery replacement rate on hybrids? prius have been selling for quite a few years, if what you guys say are true, that battery will die like no tomorrow (3 yrs), then i think we should see significant numbers of replacement by now already?

if not, then what are you basing on for your claims?

No it's better. Infiniti doesn't make a hybrid. :p

Zing!

just when you broke even on gas........ oops. your $3000 battery broke.
damn. one step forward, 2 steps back.

Really? Damn.. and here I was trying to save $10,000 cause I have to replace it every 5 years. :egads:

If I HAD to drive the same car for 98 years, I suppose the LS600h would be a stellar choice! :-)

looking at the best numbers seen so far doesn't mean anything, road conditions and other crap can make up the difference. if i really have to compare 0-60, i just go with factory numbers, which i believe are very similar between both. but then comparing 0-60 between 460 and 600 is pretty stupid to begin with

83k for avg ls460l sounds about right i say. a lot of them are tagged 80k, some 87k, and we have some 95k version

regarding the batteries for hybrid, while i also share some concern in their reliabilities, but i do have a question for those who put down on hybrid coz' of the battery replacements. are there any study or official numbers on the battery replacement rate on hybrids? prius have been selling for quite a few years, if what you guys say are true, that battery will die like no tomorrow (3 yrs), then i think we should see significant numbers of replacement by now already?

if not, then what are you basing on for your claims?
From : Top myths about hybrid vehicles : (http://ca.autos.yahoo.com/p/173/hybrid-myths)

MYTH 2. Hybrid batteries need to be replaced.


Worries about an expensive replacement of a hybrid car's batteries continue to nag many potential buyers. Those worries are unfounded. By keeping the charge between 40% and 60% -never fully charged and never fully drained-carmakers have greatly extended the longevity of nickel metal hydride batteries.

The standard warranty on hybrid batteries and other components is between 130,000 and 160,000 km(80,000 and 100,000 miles), depending on the manufacturer and your location. But that doesn't mean the batteries will die out at 160,000 km. The U.S. Department of Energy stopped its tests of hybrid batteries-when the capacity remained almost like new-after over 250,000 km (160,000 miles). A taxi driver in Vancouver drove his Toyota Prius over 320,000 km (200,000 miles) in 25 months, and the batteries remained strong.


There's little to no accurate information about the cost for replacing a hybrid battery, because it hasn't been a requirement with today's models.

usually that battery myths come from consumers that are used to inferior chargers

however, some chargers are quite smart and are able to keep the battery in good health for many years to come
and im sure any hybrid cars would have excellent charging technology to do so

From : Top myths about hybrid vehicles : (http://ca.autos.yahoo.com/p/173/hybrid-myths)
good info. so i guess all those talk about replacing batteries thus making hybrids pointless, that's pretty pointless?

First, I think the article that started all of this is about the stupidest thing I have ever seen in relation to the LS600h. I am not saying that people who buy 100K+ cars don't care about mileage but I doubt that very many people buying cars in that class are worried about "payback" of any option. Any car is almost always going to be worth less than you pay for it and the higher the tab, the less financial sense it makes. By that I mean that as far as getting from A to B financially, a Prius is just as functional as a L600h. Hard to believe that people actually got all wound up over the headline number that was only meant for shock value.

Second, I can't say I have watched hybrid battery replacement cycles but I doubt that there is support for either the sky is falling replacement cost concerns or the hybrids never ever need batteries replaced and when they do the maker will do it for nothing. I am still not sure we have had enough of them out there long enough to know. As far as replacement is concerned, that has to be a very serious problem for a hybrid to be needed. My reason for that is that a hybrid still has a petrol engine and in the case of the LS600, it is a pretty healthy gas engine. As the battery ages, it won't hold as much charge for as long as it did new. And that starts literally from day one. You may or may not see it in your mileage depending on the particulars of your commute habits. You will eventually but I doubt very many people are going to park the car because they lose a few mpg. There are stories of cabbies with 250K miles on the Prius with no battery replacement but that is probably the best environment to justify a hybrid and have the battery do well - lots of driving and charging/discharging.

To replace the battery under warranty I have to assume that somebody saw a complete failure of the battery portion which has to be a pretty low percentage. To balance that is the news that the sales of Prius batteries has increased 850% on E Bay but maybe that is just people who want to get a Prius battery pack for some reason. At least you wouldn't have to worry about your laptop running out of charge with a Prius pack in it.:D

It's about $2-3k plus tax and labour now. Someone's replaced their 2001's battery after just under 300,000km...