Do Hybrid Cars Make Cents?

According to Nick Bunkley, and data compiled by, probably not. Aside from two hybrids and a diesel car, gas would need to cost $8 a gallon before most hybrids cover their increased initial cost versus a similar, non-hybrid model.

In a big of disconcerting news for hybrid and electric car enthusiasts, Bunkley's reporting shows that except for three models -- the Toyota Prius, Lincoln MKZ, and Volkswagen Jetta TDI -- the cost savings for ultra fuel-efficient cars just doesn't add up over the long term with gas prices at $4 or $5 a gallon. Bunkley's findings may also reflect increasing fuel efficiency for conventional cars, which, of course, is a good thing for both owners and fuel use.

Obviously many hybrid and electric car owners base their buying decisions on more than dollars and cents. Some "clearly view saving fuel and doing something better for the environment as their ultimate goals, regardless of cost," writes Bunkley.

However, the cost conundrum will likely prevent widespread market saturation for hybrid and electric vehicles in the short term.

According to Bunkley, "Analysts say the added cost of the new technologies is limiting the ability of fuel-efficient cars to gain broader appeal. Hybrid sales have surged more than 60 percent this year, but they still account for less than 3 percent of the total market.

"The point where a car can actually go after a mass-market audience is when the pricing starts making sense on paper," said Jesse Toprak, vice president for market intelligence at TrueCar. "If they want these technologies to be mainstream, pricing still needs to come down."

Full Story: Payoff for Efficient Cars Takes Years


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