Haha, prev poster was right, I'm a bit inflated in my electronics data - guess you can a plasma one for 1-1.5k now, but I do remember sets being five figures about 10 years ago. Using Dell as a proxy, according its public filings, average desktops were around $850 in the latest quarter and $2K in 1997. Laptops were $1,200 average in the last quarter, and $3,910 in 1997. 10 years really isn't a huge amount of time at the beginnings of a technology, especially when viewing pricing - the first mass-produced, commercial PCs such as the Apple II and IBM PC came out in the early 80s and were priced around $3,000 (this time I checked this stat!) - 17 years later they were around $2,000 (see above stat from Dell). Model T took 6 years to drop enough in price to go below the median income level.
Do admit comparison with computer industry is a bit weak - there's more of a chicken and the egg problem with hybrids, since as the author points out they present no short term economic benefit to the end user. Battery and electric drivetrain technology needs to get much better in terms of energy density before it will make economic sense. Or gas prices can go back above $5 a gallon.
Efficiency vs. Economics
Will the recession prevent hybrid and electric cars from going mainstream?
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David Blume, a 48 year-old seafood retailer from Bloomfield Hills, Mich., feels guilty about the gas he burns during his 60-mile roundtrip commute—up to a point. A self-described environmentalist, he considered purchasing a hybrid, but balked at spending $5,000 more, an amount he won't soon recoup with gas prices at their current level. He ultimately picked a conventional Honda Civic that gets 37 miles per gallon. "I'm all for saving the environment, but my first priority is putting my kid through college," says the father of a high-school senior. "I won't even consider a hybrid unless gas prices change dramatically again."
Such sentiment could pose a major problem for beleaguered automakers that are shifting away from SUVs and banking on fuel-efficient hybrids and electric cars to stay in business. As expected, the cars showcased at this year's North American International Auto Show in Detroit were vehicles that run primarily on batteries, including the much-hyped Chevy Volt, the Jeep Patriot and the Dodge Circuit EV sports car. Also front and center were updates of already popular hybrids like Honda's Insight and the revamped Toyota Prius.
Carmakers saw the show as an opportunity to advertise positive change. "People were expecting a funeral for 2009," says Jon J. Lauchner, vice president of global program management for General Motors, but "GM is here to stay. There is no reason to think we won't get past this rough patch." Glancing around the auto show floor, he adds, "We have cars that people will buy and will buy in big numbers."
That may be a bit optimistic. Given the bleak economy and relatively tight financing market, buying a new car just isn't as easy as it once was. The million-dollar question going forward: Will the recession kill the chances of hybrid and electric vehicles from going mainstream? Asking drivers to pay more when they've got little to spend is proving to be a tough sell for the auto industry. "With gas under $2 a gallon, it's hard to convince consumers to invest that additional money," says John Nielsen, director of auto repair and buying for AAA in Orlando, Fla.
For the moment, driving green requires a substantial upfront investment. The GM Volt, which plugs into a household electric socket to charge, is slated to retail for $40,000, nearly the same price as a conventionally fueled Mercedes C Class. While Jim McDowell, vice president of BMW's Mini division, says drivers are going "bananas" over its pilot electric vehicle, the one-year monthly lease price is $850, more than twice as much as the comparable non-electric Mini. And hybrids, which use gasoline to power a combination electric-gas motor, cost more than comparable gasoline-powered vehicles. For example, Honda's 2010 Insight is slated to be the least expensive hybrid sold in the United States at under $20,000. That's still nearly $5,000 more than a Honda Civic running on unleaded. And for all the positive press and public opinion about Toyota's Prius, sales of the car plummeted 44 percent from December 2007 to December 2008.
Washington has put a lot of pressure on carmakers to go green, but that doesn't mean consumers are willing to buy, says Geoff Pohanka, a dealer with Pohanka Automotive Group in Marlow Heights, Md. The "economic crisis is trumping the environmental crisis," and it will "be a bumpy road" with many of these vehicles, especially the larger hybrids, sitting on dealer lots, says Pohanka, whose dealership sells numerous makes including cars from GM, Chrysler and Toyota. While the IRS does allow tax breaks on hybrids, they're limited and range from only $300 to $3,000 for 2008 and 2009 cars.
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