MONEY CULTURE
Daniel Gross
MONEY CULTURE | Daniel Gross
Blue-Collar Prius
Hybrids aren't just for eco-elitists anymore
For most of their brief history, hybrid cars—especially the Toyota Prius, which is attaining near ubiquity in Bushenfreude territory—have been seen as luxury goods. Hybrid car buyers have generally been yuppies willing to pay more for the double satisfaction of saving a little money on gas and flaunting conspicuous, earth-saving virtue. As such, the hybrid was generally dismissed by lunch-pail American automakers as a niche product.
But the rising cost of oil and the current recession, which started among subprime consumers and is steadily eating its way up the economic ladder, may combine to change the hybrid vehicle's image from a white-collar status symbol to a blue-collar money-saver.
Given that consumers—even well-off consumers who shop at places such as Starbucks and Nordstrom—have been pulling back in recent months, one would have thought that hybrid sales would be tanking. After all, during recessions, discretionary products suffer while discount products and companies thrive, which is why Wal-Mart has been doing well. But at Toyota, hybrids have been doing well. In March, a month in which total sales fell 3.4 percent from March 2007, Toyota sold 31,552 hybrids, up 19 percent from the year before. Sales of Lexus light trucks rose slightly, powered by rising sales of hybrid SUVs, even as sales of Lexis sedans plummeted. In this down market, sales of high-end vehicles that convey only status are slumping, while sales of slightly less high-end vehicles that convey status and promise gas savings are booming. Hybrids have become a real business for Toyota. In 2007, a year in which overall vehicle sales fell, hybrid sales rose 44 percent to constitute about 10.6 percent of sales. In March, hybrids accounted for nearly one in every six vehicles sold by Toyota.
Historically (and it's an admittedly brief history), the rap on hybrids is that the higher price one pays isn't justified by the savings in gasoline, especially since hybrids don't do much better than standard cars on the highway. (You can compare prices and mileage claims of standard and hybrid Toyota Camrys here.) But with gasoline approaching $4 per gallon, hybrids promise significant gas savings for most suburban drivers. And for power users of vehicles—those whose livelihood depends on driving, who view cars and trucks the way Prius owners might view a PC or BlackBerry, and who spend lots of time in stop-and-go traffic—hybrids present a much greater value. Take New York City's cabdrivers. Last year, New York City Mayor Michael Bloomberg decreed that by 2012 the city's taxi fleet would shift over to hybrids. And since the process has already started, it's increasingly common to find yourself, as I did on Monday, bumping through midtown Manhattan in the back of a yellow Ford Escape hybrid. The driver, who leased the car, rhapsodized about the hybrid, noting that it saves him between $25 and $30 a day on gasoline. What's more, taxi drivers apparently have to grease the palms of dispatchers to be assigned a hybrid for the day. (Yes, I know, talking to a cab driver is one of the laziest and lamest journalistic clichés out there. But in this case, it makes complete sense.)
The savings are even more significant for blue-collar companies and institutions with massive fleets of trucks. The most dramatic impact of hybrids is likely to be industrial. Business investment may be in danger of slumping, but companies that make hybrid-drive trains for trucks are booking new orders. Eaton Corp., which makes hybrid-power systems that can be incorporated into trucks, has made deals with Federal Express and Coca-Cola, which in February ordered 120 hybrid trucks. (Here are some other wins.) Today, Eaton announced it would build 207 diesel-electric hybrid systems for buses in China. Oshkosh Truck, which makes even bigger trucks, introduced hybrid-drive-technology vehicles in 2006. Its new ProPulse technology is being used for military vehicles.
Pretty much every blue-collar blue chip is getting into hybrid trucks. UPS is experimenting with hydraulic hybrid technology. Wal-Mart last year took delivery of its first hybrid trucking rig. Last month, Peterbilt Motors said it was starting full production of medium-duty hybrid trucks. And it makes sense. The gas savings and tax incentives rise with the size of the vehicle. With gas at $4 per gallon, a trucker who drives 30,000 miles annually at five miles per gallon could save $4,000 a year if he could increase fuel efficiency to just six miles per gallon.
© 2008


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Member Comments
Posted By: DGHughes @ 04/27/2008 3:46:31 PM
Comment: As more and more Prius's are bought the stereotype of the Prius owners will change, I'd like to think I am helping that to change. I owned an SUV that got 17 mpg. I loved my SUV, it fit me like a glove, it drove so smooth and I had a bird's eye view no matter where I was driving. But we moved 30 minutes from work and I knew 2 years ago that gas would never go back down to where it was so we bought a Prius, good timing to because we were able to take advantage of the $3200 tax credit from the government : ) ! I miss my SUV, I just loved it but truthfully I love my money more and I know I have more of it in my pocket because 17 mpg (at best) compared to 51 mpg (at best) is a no brainer. There will always be a debate over mpg on vehicles especially on hybrids, honestly when the summer is at its hottest and the winter is at its coldest any hybrid will ask more from its fuel engine, and the Prius mpg can drop to about 42 mpg. or lower. When the neither air nor heat is needed yes you can get 50 to 51 mpg regularly, if you drive the Prius to get the optimal mpg. sure you can get closer to 60 mpg, it just depends on how much work you want to put into it. Now, let's talk about the acceleration and speed of a Pruis, short description....I've always had a lead foot and my Pruis does not disappointment me for that matter neither did my SUV. I'm not a environmentalist and I've never hugged a tree but I know what I want and if it fits into my lifestyle then I don't really care for all the debate of owning a hybrid Prius.
Posted By: Richard Poor @ 04/13/2008 2:21:21 PM
Comment: Let's change your calculations to the upcoming, Chevy Volt and figure 75% of the 15K miles, it is driven on electricity for an equivalent of $0.75/gallon. In serial hybrid mode on gasoline, figure 50 mpg. That would mean 525 gallons saved annually, roughly $1837/year for gas at $3.5/gallon + $1669/year saved by using electricity instead of gasoline = $3506/year. With a price difference of $10,000 you would have to drive less than 3 years or 45,000 miles to break even!
Posted By: Richard Poor @ 04/13/2008 2:08:26 PM
Comment: Hybrid trucks are a good thing. Plug in Hybrid Cars combined with more solar electricity and wind electricity are a good thing. Putting more freight on trains and upgrading the railroads for rapid freight provides jobs for displaced truckers and saves wear and tear on roads and bridges. Trains use way less fuel per ton of goods moved than trucks. Jimmy Carter was correct, "the energy crisis is the moral equivalent of war" !