Carnegie Mellon Study Says Hybrids Are a Better Target for Government Investment Than EVs

A new study from Carnegie Mellon University is calling into question the wisdom of government incentives for all-electric vehicles, saying that conventional hybrids and shorter-range PHEVs like the forthcoming Toyota Prius Plug-in offer the government a bigger bang for its buck in lowering emissions from driving. The report, which was funded with a grant from the National Science Foundation, says that the long-term outlook for full-electrics is still unclear, as large lithium ion battery packs are heavy, expensive and will rely on technological breakthroughs and high oil prices to become viable from a cost perspective.

“It’s not that large battery packs are bad, it’s that they are not providing as many benefits per dollar,” said Jeremy Michalek, co-author of the study, to Bloomberg. “Ordinary hybrids increase fuel economy substantially, and the incremental cost of those systems is getting relatively small.”

American consumers thinking of trading in their car for a conventional hybrid can look forward to fuel savings and the feeling of doing something good for the environment, but one thing they can’t look forward to is a little help from the government in offsetting the so-called “hybrid premium.” Buyers of the 2012 Prius Plug-in, which gets about 15 miles of all-electric range and goes on sale in the United States next March, will be eligible for a $2,500 incentive. Meanwhile, purchasers of plug-in electrics with large battery packs like the Nissan LEAF and Chevy Volt qualify for a $7,500 government tax credit.

The reasoning behind subsidizing large-battery plug-ins while allowing the market for hybrids to grow organically is that, as the Carnegie Mellon study points out, hybrids are often already a cost-neutral investment for consumers. Assuming fuel prices remain at current levels or higher over the near-term, most hybrid owners can expect to save money over the life of their vehicles compared to the average gas car. Without government subsidies, the current generation of full-electrics will still fall far short of paying their owners back unless gas prices increase substantially in the coming years.

If the goal of stimulating the electric vehicle market is to decrease emissions and fuel use, the Carnegie Mellon study posits that more could be achieved by starting small—a vision Toyota has embraced in creating it’s short-range plug-in Prius. While Toyota has been extremely aggressive in building its hybrid lineup, it has been far less enthusiastic about full-electrics, for many of the same reasons cited in the Carnegie report.

“It’s possible that in the future plug-in vehicles with large battery packs might offer the largest benefits at competitive costs if the right factors fall into place,” said Mikhail Chester, the study’s co-author in a press release. “But such a future is not certain, and in the near term, HEVs and plug-in vehicles with small battery packs provide more emissions benefits and oil displacement benefits per dollar spent.”

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  • Max Reid

    Main difference is that the Plugin owners may or may not use the Electricity, but the EV owners will, they have no other choice.

    EVs may not be good for everyone, but for those whose commute is 60 – 80 miles / day, an EV with 100 mile range will be a better option.

    Also the Hybrids like LS600h, Tahoe, BMW X6 does not make any sense, they just consume lot of gas.

  • Nelson Lu

    I agree with Max. Further, a new technology is rarely “worth it” in the beginning. An EV incentive will encourage further EV research to make it “worth it.”

  • MrEnergyCzar

    I’ve always felt the EREV’s were the way to go. It’s too much of a leap asking the consumer to change the way they drive. I’m finally getting my Volt this week.


  • yeahyep

    Electric cars will actually result in higher CO2 emissions than hybrids in regions where electricity is primarily generated from coal. In fact 50% of America’s elec. comes from coal, so in many regions electrics could be polluting more than hybrids.
    Since it doesn’t matter where you drive your hybrid, hybrids can be more of a universal and widespread tool to lower CO2 emissions, compared to electric cars.

  • Dave K.

    I think MrEnergyCzar is right for near term, but some day we need to quit burning stuff for energy! And I think the source of the electricity is a seperate issue yeahyep, EVs are so much more efficient and over time the grid keeps getting cleaner, where as your ICE car keeps getting dirtier, and at least that coal is domestic!

  • FamilyGuy

    There are two things in the energy debate that are often not separated. It’s domestic (coal) vs foreign (oil). It’s fossil (oil, coal, natural gas) which is finite vs renewable (solar, wind).

    I had a solar company stop by my house last month. My house was in the okay to good range, not by any stretch of the imagination great unless I was willing to cut down a whole bunch of trees (which I am not).

    Nonetheless, with my okay to good rating for solar, it would still meet all of my electricity needs and then some. I could get an EV, hook it into my solar grid and go all renewable. I’m tired of reading about how EV’s are worse for the environment then gas guzzlers. It does not have to be. As a side note, it was an estimated 5-7 pay back on my potential solar investment.

    Aside from getting my own solar system if the upfront cash is an issue, I can opt to have my electric company (NStar) provide me with either 50% or 100% of my electricity from a wind farm. Again, I am off coal. Granted, I need to pay the electric company a small fee to have my electricity come from the wind farm, but again, it can be done.

    And while I’m here, where is the Mazda5 hybrid?

  • James Davis

    Carnegie Mellon does not know what they are talking about. EV’s have always been the better option over any kind of ICE vehicle. Ford said that they would throw a couple of solar panels in their EV to offset the cost of electricity, and if the home owner throws in a couple of solar panels, you could charge your EV and your home for free. Compare free to $50 to $100 dollars for a tank of gas, and $100 to $300 for a tank of diesel and $200 to $600 utility bill and tell me what is the better option…ICE or EV; gas or solar.

  • dutchinchicago

    This article is missing the point. A government is not like a family and it’s decision process involves more complicated factors.

    EVs are currently an early adapter product. It is relatively expensive and the technology has a lot of room for improvement. By buying these products now the government is trying to help this product along to go from an early adapter product to a more mature mass market product. This is a goal that will benefit America as a whole and justifies making a purchase decision that is not necessarily the most optimal from a cost perspective when you look at it as just a vehicle purchase.

  • AP

    “EVs are so much more efficient”

    Actually, the efficiency of converting the heat from a fuel into propulsion is almost identical whether you do it in the car (with an IC engine) or at a power plant (with a boiler and steam turbine).

    You don’t save energy with EV’s.

    “Ford said that they would throw a couple of solar panels in their EV to offset the cost of electricity”

    Nothing wrong with solar panels on the roof, but their energy supplied doesn’t amount to a hill of beans. It might reduce your plug-in charging energy by a couple of percent, and may never pay back the cost of the panels.

    The best use of solar panels is to run a fan to blow the hot air out of the car on hot days. Then you don’t need air-conditioning as much, you’re more comfortable, and wou don’t kill your range by running A/C.

  • Nelson Lu

    AP, it’s a lot more efficient to “transport” electricity than gas. That gas won’t magically appear in your tank.

  • Capt. Concernicus

    “Throwing” solar panels on the roof of your car and some on top of your house is an expensive proposition. Solar panels are very inefficient anyway.

    If your commute is 60 or 80 miles a 100 mile range EV might not be your best considering that a 100 mile EV isn’t going to give you 100 miles. More like 70-80 miles.

    Without subsidies, tax credits and rebates EV’s are an epensive proposition and will not pay the owner back for many years.

    But don’t get me wrong. I think EV’s will eventually be more inexpensive, have a longer range and quicker charge times.

  • DownUnder

    AP, you said:

    Actually, the efficiency of converting the heat from a fuel into propulsion is almost identical whether you do it in the car (with an IC engine) or at a power plant (with a boiler and steam turbine).

    Do you really think so?

  • AP

    “it’s a lot more efficient to “transport” electricity than gas. That gas won’t magically appear in your tank.”

    True, but making electricity at a power plant loses 70% of the fuel energy burned to begin with, either out the smokestack or the cooling towers. At the wheels, the enery driving your wheels is only 25% of the original fuel energy. You can find this on the Department of Energy website. The government doesn’t emphasize it because it isn’t “consistent” with admistration policy.

    IC engines also convert about 25% of a fuel’s energy to propulsion, depending on driving conditions.

    sean t: It is pretty incredible when you examine the thermodynamics of the energy going from the power plant to the car’s wheels. Most people are aware of the huge losses in IC engines, but don’t know that electrical generation/consumption is no better.

    I am an experienced automotive enegineer, and even I was surprised!

  • Capt. Concernicus

    @ AP–

    I knew that powerplants were very ineffiecient as well as ICE’s. So it’s just staggering how much energy is wasted from the source until it reaches the tires to make our cars move.

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