thowing gasoline on troubled waters

[Mike Arman]

As gasoline prices climb, sometimes we may be tempted to think about they 
newer hybrid cars. Howver, there's an article from Australia which should 
give us pause . . .

(some non-pertinent items snipped, a few choice comments added)


>THE HIDDEN COST OF HYBRID CARS
>
>Hybrid cars are hitting our roads in ever increasing numbers as purchase 
>prices come down and fuel prices go up. But the substantial hidden costs 
>of owning a hybrid car could make it a financial time bomb.
>By Glenn Butler
>
>Owners of 'environmentally friendly' hybrid cars like the Toyota Prius and 
>Honda Insight may be hit with a bill for up to $7000 when their car's 
>battery dies less than eight years after purchase. The battery unit, which 
>has a lifespan of 8-10 years -- shorter in hotter climates like Australia 
>-- cannot be reconditioned. It must be thrown out and replaced with a new 
>one, at considerable cost to the owner.
>
>"A replacement battery on the Insight retails for $6840," said Honda 
>spokesman Mark Higgins. Honda began selling the Insight hybrid in Japan 
>car in 1997 and in Australia in 2000. It sold 44 Insights before 
>withdrawing the futuristic-looking two-door coupe from the market earlier 
>this year. Honda will re-enter the hybrid market with the Civic sedan in 
>March, and aims to sell around 20 per month.
>
>Toyota's Prius four-door sedan has fared considerably better since it 
>launched in October 2001. Nearly 500 Australians had bought the hybrid 
>sedan by September 2003, and Toyota hopes to move a lot more of the second 
>generation model released in September. Toyota divisional general manager 
>- marketing, Scott Grant believes there is a market for around 50 Prius a 
>month. "This product is no longer a science experiment but a mainstream 
>car," he said.
>
>Toyota's manager of alternative fuels and specialized vehicles, Vic 
>Johnstone, concedes the batteries, like the car itself, are built to last 
>less than a decade. "The life of the car and the battery are supposed to 
>be the same... around 8 to 10 years," he said. "We're not expecting to 
>replace them [the batteries]. In fact we only hold one [replacement] 
>battery in stock nationally."

Interesting - buy this car and expect to discard it in eight to ten years . 
. . ! Average Prius sells for $24,000, so you have an annual cost of 
ownership of between $2,400 and $3,000.



>A high percentage of hybrid vehicles brought to Australia so far have 
>ended up in government hands. In fact Toyota believes government and 
>business fleets will account for around 50 percent of all Prius purchases. 
>Fleet managers turn over their vehicles after 2-3 years, meaning 
>unsuspecting second hand buyers will be stuck with an unexpected and 
>unwanted bill down the track.
<snip>
>Renault-owned car company packaging Prius' Hybrid Synergy Drive system 
>into future models.
We all know about Renault's legendary durability . . .



>Toyota lowered the price significantly on the Prius battery pack, from 
>$4500 on the first model to around $3000 on the latest version, though 
>unlike Honda, which offers an eight year warranty on the battery, Toyota 
>only offers five years.
>
>Despite the dramatic price drop, hybrid ownership remains a nod to better 
>fuel economy, not financial savings. CarPoint's review of the Prius, 
>published in October, compared the hybrid's fuel consumption to a 
>similarly specified Toyota Corolla, and reached the conclusion it would 
>take 15 years before the Prius' fuel economy paid off the extra purchase price.

Break-even is therefore five to seven years after the car is junked . . .


>Add battery replacement every eight years to this equation, and 
>replacement parts costs as the vehicle exceeds its planned life of ten 
>years and components wear out, and owners have no chance of ever seeing a 
>dollar back.
>
>To further add environmental insult to injury, a considerable cloud exists 
>over just how recyclable NickelMetal Hydride batteries really are - some 
>reports even suggest that those who buy green may be doing more 
>environmental harm than good. Both Toyota and Honda were unable to tell 
>CarPoint exactly how much of the battery could be recycled. Both have left 
>the task of recycling in the hands of a third party recycler.
>
>Internet site www.BatteryUniversity.com warns against the careless 
>disposable of Ni-MH batteries, due to the toxicity of it main derivative, 
>Nickel.
>
>" The main derivative is nickel, which is considered semi-toxic. 
>Nickel-metal-hydride also contains electrolyte that, in large amounts, is 
>hazardous. If no disposal service is available in an area, individual 
>nickel-metal-hydride batteries can be discarded with other household 
>wastes. If ten or more batteries are accumulated, the user should consider 
>disposing of these packs in a secure waste landfill."
>
>Battery packs like that used by Toyota in the Prius, contain up to 28 
>groups of six Ni-MH battery cells. Correct disposal is therefore important.
>
>"TMCA has a process in place where it comes back to the dealer," said 
>Toyota's Vic Johnstone, "and we can recycle the battery. There's a 
>supplier in Australia that can manage the recycling."
>
>The global market for hybrid vehicles is booming: by 2010 Toyota expects 
>to have sold two million worldwide, while Honda expects hybrid power 
>trains to account for five percent of its worldwide sales in the 
>foreseeable future. Both General Motors and Ford -- the world's two 
>biggest car makers -- have yet to significantly flex their hybrid muscle 
>in the market, and industry watcher JD Power expects hybrid sales to 
>increase tenfold in the next five years.
>
>Most agree that hybrid vehicles are a stepping stone to fuel cell 
>technology, which requires a major infrastructure overhaul to be 
>practical, but it's hard to see a single financial reason for consumers to 
>buy petrol/electric hybrids.


Conclusion - these vehicles are an EXPENSIVE way to "feel good" - they have 
a significantly higher life cycle cost, there is a considerable chance of 
needing an extremely expensive vital component BEFORE the "8 to 10 year 
life of the car", and they also have major pollution issues in the battery 
disposal.

After a careful look, I'd suggest these vehicles be avoided - they ain't no 
bargain, and the cure appears worse than the disease.

Give them ten more years to solve the problems, then come back and try again.

Best Regards,
Mike Arman