Efficiency vs. Economics

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.

I don't know where CommonSense2009 got his/her plasma tv or computer but I think he got ripped off. Of course electric/hybrid is a new technology if you consider more than 10 year to be new still.

It always astonishes me how quickly people will believe conspiracy theories - Oil companies own Big 3 car companies and hybrid and electric prices are high due to government collusion. the reason for high prices is simple - its a new technology. Car companies need to be able not only to recover the variable costs (labor, raw materials) of each vehicle, but the significant capital investment required to produce them - R&D, plant retooling, etc. When the Model T first came out in the early 1900s, it cost $850 - or 1.3x the median annual income of $500 (you have to be careful with these statistics - you'll often see the Model T price quoted as "$20,000 in today's dollars" but that's indexing to CPI, which doesn't give a clear picture of affordability back in 1909 - you need to compare the price 1909 with the median income 1909). The typical PC in 1995 cost well over 3k, now a mainstream PC can be purchased for 1-1.5k. a 42 inch plasma TV as recently as 2000 cost almost 10k, now they are 2k. The point is, new technologies are always expensive. Although they have been out for some time, hybrids are more complicated than simply slapping on an electric motor - although they've been around for some time (I think 10 years), there is still lots of improvement in battery technology needed - it doesn't help fuel economy if the extra weight of all those batteries does not make up for the power it produces.

To the people here who are saying that automakers should lower prices to increase sales and thus get in better financial health - this is the problem with American automakers and American industry - too focused on volume, to the point that they are willing to sell things at a loss. You'll never make any money selling $10 bills for $8...

It always astonishes me how quickly people will believe conspiracy theories - Oil companies own Big 3 car companies and hybrid and electric prices are high due to government collusion. the reason for high prices is simple - its a new technology. Car companies need to be able not only to recover the variable costs (labor, raw materials) of each vehicle, but the significant capital investment required to produce them - R&D, plant retooling, etc. When the Model T first came out in the early 1900s, it cost $850 - or 1.3x the median annual income of $500 (you have to be careful with these statistics - you'll often see the Model T price quoted as "$20,000 in today's dollars" but that's indexing to CPI, which doesn't give a clear picture of affordability back in 1909 - you need to compare the price 1909 with the median income 1909). The typical PC in 1995 cost well over 3k, now a mainstream PC can be purchased for 1-1.5k. a 42 inch plasma TV as recently as 2000 cost almost 10k, now they are 2k. The point is, new technologies are always expensive. Although they have been out for some time, hybrids are more complicated than simply slapping on an electric motor - although they've been around for some time (I think 10 years), there is still lots of improvement in battery technology needed - it doesn't help fuel economy if the extra weight of all those batteries does not make up for the power it produces.

To the people here who are saying that automakers should lower prices to increase sales and thus get in better financial health - this is the problem with American automakers and American industry - too focused on volume, to the point that they are willing to sell things at a loss. You'll never make any money selling $10 bills for $8...

Enter Your Comment

I'm tired of people proclaiming they are an "environmentalist" and won't pay a little more for a hybrid. We'll if ou'd really check it out, you'd see you could get a Prius now for about the price of a regular Civic at purchase and get 30% savings on gas and save a ton when the gas prices go up, which they no doubt will sooner rather than later.

Electric cars just move the carbon from the tail pipe to the smoke stack NOT AN ANSWER. Its a shell game, besides we do not have the power plants built to take the load. I don't want to return to the blackout of a few years ago because gas prices spiked for six months.

I got tired of waiting for the elusive all-electric car - it is always 2 years out. So, for under $2000 I converted my 2002 VW diesel Beetle to a grease car. (it runs on used, filtered vegetable oil) Now I don't pay for gas AND I am carbon neutral. Oh, and my car smells good too. Since I don't pay for gas anymore, the cost of the conversion should pay for itself relatively quickly. All in all, it was pretty easy to convert but I would not have done it if I had not known somebody else who had already done it and could hold my hand through the process. To be fair, a solution like this does make as much sense in colder climates. I live in Las Vegas.

Until they make an electric mini van I won't buy. I require the vehicle to carry the scooter I ride because of paralysis. Sooner or later the ADA issue will arise.

I had thought about helping GM by considering a Chevy Volt. That thought was vaporized by the absurdly high sticker price projection of $40,000. Now I'm looking to find a used civic hybrid or prius before the gas price makes it's inevitable climb and they become coveted purchases again.

I can't afford the prices they want for them, so why should I worry?

Well, the recession will stall the reorganization of the U.S. auto industry until merger and acquisition funds start flowing. We must deal with that before we worry about what kind of vehicles will be bought and sold.

user56, please kill yourself.

This is the same game played in the 70's. We got hot about gas prices, started oil shale projects, elec. cars etc. OPEC said "we will just lower prices an kill these projects". They did. Now hybrids, elect., wind power are all in danger. The gas prices will stay low just long enough to kill all these and then hello $5.00 a gallon. Doesn't anyone out there read history or remember what happened in your own lifetime? And don't wait on the big three, all their hybrids except two only increase gas milage 2 to 3 miles per gallon. That is what happens when your magor stockholders are oil companys.

Forget the environment for a minute. Give me an electric car that will cost me no more at the end of the day than my present car and I'll think about it. Give me an electric car that will also make me save money and I'll become as green as can be.

Just wait, gas prices will go up this summer, just like they do EVERY summer. Heck, the only reason gas prices are still down is because the economy is down and car sales are down. Everyone who could possibly afford to get out of their gas guzzler into a more fuel-efficient car did so LAST summer, when prices hit $4 a gallon or more. Want to sell more cars? Cut the price tag, DUH!

I don't understand why GM & the other old US makers don't simply buy a Prius, take it apart, and build an imitation -- the sincerest form of flattery after all..... $40,000 for a Volt? Are you kidding me? You can get a decent, spacious Prius used for 15-20, and even a new one for not too much more, and they want 40 for a Volt? Why not pull a Vibe/Matrix move?