Gas prices would need to reach about $12.50 a gallon for Chevy Volt purchasers to actually recoup the cost of the car in fuel savings in the time they’re likely to own the car, according to The New York Times. The fuel-efficient technologies that enable a car to be battery-operated in the first place are just far more expensive than conventional internal-combustion engines, so what consumers save on fuel, they more than paid for upfront. That goes for other electric car models and, to a lesser extent, hybrid models, as well. From the NYT report:
[O]pting for models that promise better mileage through new technologies does not necessarily save money, according to data compiled for The New York Times by TrueCar.com, an automotive research Web site.
Except for two hybrids, the Prius and Lincoln MKZ, and the diesel-powered Volkswagen Jetta TDI, the added cost of the fuel-efficient technologies is so high that it would take the average driver many years — in some cases more than a decade — to save money over comparable new models with conventional internal-combustion engines.
That is true at today’s pump prices, around $4, and also if gas were to climb to $5 a gallon, the data shows.
Gas would have to approach $8 a gallon before many of the cars could be expected to pay off in the six years an average person owns a car. [And, again, in the case of the Volt, that number is closer to $12!]
Whatever motivates consumers to purchase the Volt and other cars like it, it’s not cost-consciousness. Volt buyers are extremely satisfied customers, price and fires aside, and it’s probably because they believe they’re helping the environment. Some buyers might think they’re saving money, but the truly cost-conscious consumer would run the numbers. No wonder the Volt hasn’t garnered a mass market yet: Most consumers do have to factor cost into their purchase of a car.
That’s the reality that the president recognizes, of course, and it’s why he’s so determined to bring consumer costs down through — you guessed it — tax breaks. The president recently proposed to increase the amount of the tax break for a Volt purchase from $7,500 to $10,000 — probably because, with just 12,000 Volts on the road right now, we’re a long way from his goal of 1 million electric cars on the road by 2015.
As always, if some customers want to pay out the wazoo for an electric buggy, they can be my guest — but I still cry foul on incentivizing the purchase through tax breaks. Why does someone’s desire to feel good about himself and the image his electric car projects justify a tax break? Why should producers of the vehicles receive a pass on having to innovate to bring costs down? They shouldn’t. The day I can recoup the upfront costs of an electric car in fuel savings in six years or so without any kind of a tax break, I’ll consider buying one. I suspect other consumers would be more amenable to electric cars at that point, too.
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