Should You Buy a Plug-in Hybrid?

Despite skepticism and misinformation, plug-in hybrid electric vehicle (PHEV) sales continue to rise, new models are being introduced, and customer feedback has been overwhelmingly positive.

One of the biggest reasons to go for a PHEV is they have the range and convenience of a high-mpg internal combustion car, but also operate like an electric car for limited distances – around 11 miles for the shortest to 38 or more for the longest.

Deciding what daily range you need is a big part of whether a given plug-in hybrid gets the thumbs up. Then, assuming one keeps it in the gas-free zone, it can be recharged at home for perhaps one quarter the cost of gas and drivers can nearly kiss the gas station goodbye except when traveling longer.

The first plug-in gas-electric car – the Chevrolet Volt – was launched in December 2010, fully 102 years and a couple months after launch of the first mass-acceptance internal combustion automobile, the Ford Model T.

The Volt is only available as a dedicated extended-range EV that functions differently in all-electric and gas-only mode than the modified hybrids – Toyota Prius PHEV, Honda Accord PHEV, and Ford Fusion Energi and C-Max Energi PHEVs.

The Volt was designed uniquely as an "extended-range electric vehicle" and while it uses both electricity and gas, operates fundamentally differently than parallel hybrids designed to plug in.

The Volt was designed uniquely as an “extended-range electric vehicle” and while it uses both electricity and gas, operates fundamentally differently than parallel hybrids designed to plug in.

Together, these cars represent a shift away from a century of entrenched technology and attitudes and they are a less radical way to do it than utterly cutting the petroleum-based umbilical cord with a battery electric car.

Opinions on PHEVs are as colorful as any you’ll find on YouTube. PHEVs and all-electric cars have also had to overcome consumers’ tendencies to fence sit, not to mention surveys have shown shoppers may have no clue how these cars work before rejecting them out of hand.

Maybe we should not be surprised sales have started modestly? But while sales numbers are still well below mainstream levels, PHEVs have established a foothold, and more models are due to follow.

Helping the many fronted battle against present realities are federal and in cases state incentives, as well as some discounting and value-priced lease deals.

Smart Solution?

Market studies show PHEV buyers have included some of the best educated and most technologically knowledgeable people who take the effort to make a qualified decision.

And it does take more than the usual analysis to decide whether a PHEV is a smart choice, and which one would best fit specific needs.

Saving money is only one bonus from burning less fuel and relying on domestically sourced electricity.

Whether you have Al Gore’s photo framed on your wall, or pinned to your dart board, regulators and scientists largely consider greenhouse gas emissions a global threat, nearly everyone at least agrees emissions are bad for us, and electric powertrains emit nothing.

electric-cars-global-warming-emissions-fact-2
 

The Union of Concerned Scientists has assessed the well-to wheel impact of plug-in cars and – as skeptics are quick to observe and exaggerate – some emissions are produced as a byproduct of electricity generated to power electric cars.

Analyses have shown power station emissions needed to recharge a plug-in car are less than the emissions from a conventionally powered car – and this varies by region depending on the power source mix contributing to respective grids.

Overall, grids around the country are becoming cleaner as coal fired plants go offline and less-polluting plants, such as natural gas fired and renewable energy powered, come online.

 

Ancillary Benefits

Beyond potentially saving money and the environment, electric automobile propulsion also tends to be viewed as enjoyable and convenient.

Just because America is “addicted to oil” doesn’t mean you have to be.

3B_POC_Charger

The value of rarely having to stop, fill, and pay a gas station is a relief PHEV adopters soon discover. And unlike pure electric cars, PHEVs’ smaller batteries can typically be recharged from wall current overnight or in a few hours. One trick is to set recharging to off-peak hours when rates are lowest.

And beyond that, PHEVs are fun to drive and satisfying, and this is worth mentioning.

For one hundred years whispery quiet driving was the bragging point of the most expensive luxury cars in the world. Today, in all-electric mode, PHEVs are Rolls-Royce quiet and smooth.

A few of them are reasonably quick with instant torque, and handle decently as well.

Admit It

As a newcomer technology priced generally higher, PHEVs are typically put under a microscope by those poring over every extra penny – and that is fine if you are from the planet Vulcan.

Normally buying guide articles pose as strict cost-benefit analyses coming down on one side of the author’s degree of research (or bias) or the other attempting to recommend whether you should answer “yay” or “nay!”

Then again, marketers can go too far pushing cars that are beautiful but fall short in other criteria. The no-longer-in production 2012 Fisker Karma was not bad, but had issues, was expensive, and the company was bought October 2013 by a Hong Kong investor.

Then again, marketers can go too far pushing cars that are beautiful but fall short in other criteria. The no-longer-in production 2012 Fisker Karma was not bad, but had issues, was expensive, and the company was bought October 2013 by a Hong Kong investor.

We’ll put on our curmudgeon hat in just a minute, but first let’s have a dose of reality on human nature and actual purchasing behavior.

Quote: “People don’t buy for logical reasons. They buy for emotional reasons. – Zig Ziglar

 

Do you think this is hype? That’s fine, but first go to a search engine and punch in “people buy for emotional reasons” and see what you come up with.

Fact is, a car purchase is a fairly big ticket item, and the net “experience” or how it makes you feel is part of it.

For any purchase, if you like how something looks, performs – or how great it is for the environment, your budget or values – you may pay for it even if there are cheaper alternatives.

People opt all day long for luxury models when a Corolla would involve less cost to own. Or others may go for sports cars when, again, a cheaper set of wheels would work.

Hard Facts

The flip side to this emotionally tinged decision process is people also need to believe there are solid reasons to justify why they spend their money – and with PHEVs, there are, or at least there can be.

If you need to crunch numbers to justify a $35,000 plug-in, consider the $76,000-plus Cadillac ELR. Based on the Volt with nary an improvement in efficiency, the luxury car is to launch January 2014, and has already had its marketing chief say they won't sell many of this "technological halo."

If you need to crunch numbers to justify a $35,000 plug-in, consider the $76,000-plus Cadillac ELR. Based on the Volt with nary an improvement in efficiency, the luxury car is to launch January 2014, and has already had its marketing chief say they won’t sell many of this “technological halo.”

A full analysis of every single scenario would be impossible, but here are variables to be aware of in analyzing actual cost of ownership, time to payback, and whether a purported eco car would really be an extravagance in disguise.

  • Selling price, fees, title, and tags
  • Interest on financing or lease rate
  • Federal or state subsidies that could offset money spent
  • Fuel and electricity costs
  • Safety ratings
  • Insurance premiums
  • Estimated depreciation
  • Anticipated maintenance

 

Click image to enlarge.

Fusion Energi (not shown) shares numbers with C-Max Energi. Click image to enlarge.

Your Homework

A simple balance sheet analysis would involve using the above variables to estimate actual monthly costs for a plug-in hybrid under consideration, and compare them to costs for another prospective car – be it a regular hybrid or any other vehicle.

Real world gas savings are entirely up to you. Keep the car in its all-electric zone for daily driving, and you’ll notice your electric bill go up modestly and you’ll eliminate the gas bill.

If you plan to travel non-electrically – say on trips, or because your daily drive exceeds the all-electric range of a given car – you’ll want to assess gasoline costs for those miles to help qualify the actual degree of savings.

Honda Accord PHEV.

Honda Accord PHEV.

On the other hand, if you do not drive enough electric miles per year, you may not save enough fuel to pay yourself back for having bought a plug-in model over a regular hybrid stable mate – true for all except Volt which is plug-in only.

All these cars are eligible for federal and depending on where purchased, state subsidies. Specifically, the federal tax credit the Volt can receive is up to $7,500, the Fords can receive $3,750, and the Prius PHEV and Accord PHEV can receive $2,500. This is based on the kilowatt-hour size of their batteries. A larger battery is assumed to offer longer emissions- and gas-free driving.

On a strict cost-accounting basis, these cars have been shown to pencil out – but they do not always.

The Volt gets the biggest boost – states like California, Pennsylvania and Colorado for example kick in over a couple thousand or more, and net reductions with full federal credit has seen buyers factor low five-figure price cuts. A Volt netting for middle 20s puts it well into regular hybrid price territory.

 

Random Considerations

For individual overviews on each plug-in model, we’ll refer you to ones we’ve written for the Volt, Prius, Accord, Fusion, and C-Max, but following are some stand-out pointers.

Remember, there is no PHEV that beats all comers on every point.

Ford C-Max Energi.

Ford C-Max Energi.

Leasing instead of buying a PHEV can make sense, as the federal tax credit may be rolled in and cut the rate even for people who’d not otherwise qualify on their tax returns.

Leasing may be smart also because this does not tie you to factors like possibly less than-expected resale value. You may benefit now and get out of a car in time for the next advancement to come along.

At speed all these cars eat up electrons quicker, and they are best suited for sedate commuting if one desires maximum efficiency.

But Should You Buy One?

Yes, if your situation permits and we’ve covered most of the important things to consider. Though they cost more, subsidies and fuel savings mean plug-in hybrids can become a case of “less is more” assuming you recharge, drive enough miles annually, and stay as gas-free as possible.

“PHEVs pencil out depending on travel distance routine,” says Woods, “So if a driver can use the battery for primary fuel through residential and workplace charging, then gas becomes a minor cost.”

Toyota Prius Plug-in Hybrid.

Toyota Prius Plug-in Hybrid.

The answer for you could also be “no” for reasons alluded to – including your ideological orientation or because the daily electric range is not enough for your needs.

Or you could be one who’s waiting to see what’s next.

It’s expected all-electric range and fuel efficiency will improve. The next generation Volt may be launched in 2015 or 2016, and the improved Prius PHEV is due around 2015 also.

It’s a given technology will get better tomorrow, but if you want a worthwhile solution, you need not wait for a plug-in hybrid that can make sense today.