Sunday, September 22, 2013

Should You Buy a Hybrid Vehicle?

One bias I will declare right up front and it is that I have always considered a one-motor vehicle to be a more elegant engineering solution than a vehicle with two (or more) motors.  So, when you consider that a hybrid vehicle is one that uses both a conventional internal combustion engine (fuelled by gas or diesel) and an electric motor powered by a battery, it is going to take some convincing that hybrids are a better overall solution.

For the purposes of this discussion, let's focus on fuel economy and total cost of ownership.  The other factor is overall driving dynamics for which the early hybrid vehicles have received some criticism, however, let's address the economic arguments for today.  The "elegant" solutions I mentioned above would include 100% electric vehicles, gasoline, and clean diesel.  If we consider only gasoline, diesel, and hybrid options, we have one car maker with all three.

The Volkswagen Comparison

How about the recent study done by the National Post comparing three Volkswagens:  
  1. 2013 Jetta GL powered by a conventional, naturally aspirated (as in no turbocharger) gasoline 2.5-litre in-line five-cylinder
  2. Jetta Turbo Hybrid, powered by a 1.4L turbocharged four-cylinder mated to a 27-hp electric motor
  3. Jetta TDI, with the company’s evergreen 2.0L turbo-diesel four-cylinder.
The official Natural Resources Canada rating for the gasoline Jetta 2.5L is 9.1 litres per 100 kilometres in the city and a more miserly 6.2 L/100 km on the highway. The TDI’s (turbo diesel) corresponding numbers ring in at 6.7 city and 4.6 highway, VW’s 2.0L turbo-diesel showing decent around-town economy along with outstanding highway mileage.  Still, the Hybrid trumps all, its 4.5/4.2 L/100 km ratings showing the efficiency expected in city driving for a gas/electric combo, but also better highway economy than the TDI, which is a little surprising. A hybrid’s electric motor’s added boost is usually most effective at low speeds and generally less efficient at highways speeds. Could Volkswagen have finally unlocked the secret to diesel-beating highway fuel economy?

Unfortunately for the government ratings and Volkswagen’s engineers (who continue to profess that the hybrid is more thrifty than their lauded oil burner), the answer is quite simply no.  In all National Post tests at steady-state highway cruising, the diesel trumped the Hybrid (and, naturally, the 2.5L gas engine).  Please note that all three cars were driven at the same time, tail-to-front, their cruise controls set to identical speeds.  Even at the lowest speeds, when they thought the Hybrid’s turbocharged engine might be at its most frugal, the TDI (diesel) always triumphed, though by a smaller margin.

For the record, with a speedometer reading indicating 100 kilometres an hour the TDI sipped 4.2 L/100 km, while the Hybrid consumed a still-economical 4.8 L/100 km. The 2.5L GL, unsurprisingly, trailed at 5.9 L/100 km.   And the faster they went, the greater the diesel’s advantage became (though the Hybrid hung in there better than other gas/electrics tested).

In town, the results, as expected, reversed. The 2.5L was left even further behind during the stoplight circuit, averaging 10.8 L/100 km during the Port Hope, Ontario, test run. The TDI, meanwhile, posted a still-credible 7.9 L/100 km, while the Hybrid’s electrical assistance proved its worth by sipping just 5.9 L/100 km.

What about the eco impact of hybrids?  What happens to the batteries?

The conventional wisdom has been that hybrid batteries have a short lifespan and are expensive to replace?  While the nickel-metal hydride batteries used in the current generation of hybrid cars would indeed be expensive to replace, costing at least a few thousand dollars, the reality is that most car manufacturers warranty their batteries for 8-10 years or 160,000 km. Since there aren't yet many hybrids on the road that have hit those lengthy milestones, it's difficult to ascertain how long hybrid batteries will actually last. Anecdotally, however, a cab driver in Vancouver drove his Toyota Prius 320,000 km in 25 months, and his car's batteries remained strong.

Average Annual Vehicle Operating Costs recently calculated the annual costs of operating an "average" motor vehicle in Canada by using CAA data and a Toyota Camry travelling 18,000 kilometres per year with gasoline costing $1.23 per litre.  Here's how the breakdown looked:

Depreciation      $3,634
Auto Insurance  $2,667
Fuel Cost           $1,822
Repairs              $1,180
Financing Cost  $1,025
License & Reg  $   124
Total                $10,452

It seems clear that a Hybrid will get you lower fuel costs but what about depreciation?  Michael Vaughan at the Globe & Mail noted recently that if you go back to the 2008 model year and compare the gas version and the hybrid version of the Honda Civic. You would have paid more for the Civic hybrid yet the hybrid is worth less today than the gasoline Civic. The gasoline engine Civic has held onto 43 per cent of its purchase price while the hybrid only gets 38 per cent of its original value. Same story for SUVs. The 2006 Lexus RX gasoline engine SUV holds 42 per cent of its value while the more expensive hybrid only hangs onto 38 per cent.

Now let's take a look at clean diesel versus gasoline. The 2008 Jetta with gasoline engine holds onto 38 per cent of its value while the Diesel Jetta holds 48 per cent.  Big difference.  Now to the SUVs; let's compare the gasoline and clean diesel versions of the 2009 Mercedes-Benz M Class. Again diesel is the winner, holding 55 per cent of its value over four years as opposed to the gasoline version that only hangs on to 49 per cent.

If you want to go "green" yet come out ahead in the Depreciation Derby then it looks like diesel is your choice over hybrid.  It doesn't mean that one technology is superior to the other, but it does demonstrate what the market thinks.  Diesels are perceived by consumers as economical and reliable so they retain more value.  Hybrids, and one would assume battery electric cars, are more problematic.

Parting Thoughts

It's interesting to me (because I sell Mazda vehicles) that Mazda decided not to offer hybrid versions of their vehicles at all and instead, dramatically re-worked the engines (both gasoline and diesel) along with weight reductions to the vehicles that is achieving hybrid-level fuel economy numbers without the added weight and expense of that second motor and its batteries.  Other manufacturers are also discovering that re-thinking the gasoline and/or diesel powerplant is proving to provide similar benefits to the hybrid without the drawbacks.  The other options that have appeared recently include SKYACTIV (Mazda), EcoBoost (Ford),  and CVT (Nissan and others).  Almost all car manufacturers have developed (or are working on) a 100% electric vehicle which is looking more like the true alternative to the internal combustion engine (gasoline or diesel).