Hybrid car economics will face a new road test this month with the arrival of fresh models sporting revised mileage ratings from the Environmental Protection Agency.
This year, new test standards have forced manufacturers to lower advertised efficiency claims on most models compared to previous years, and car lots are bracing for a tougher environment for hybrid sales.
It will “make for an interesting summer,” said Phil Reed, the fuel economy guide editor at auto website Edmunds.com. The estimations are based on data from Edmunds.com that assumes 15,000 miles driven per year and gasoline at an average price of $2.70.
Hybrids can cost from $1,500 to $4,500 more than their gas-only equivalents. The new mileage estimates mean it will take longer to recoup that extra cost in money saved on gas. Experts say the shift could dampen demand, although some hybrids will look better on paper than others.
According to a formula devised by Edmunds, it would take nearly 10 years to recoup the extra costs after buying a 2007 Mercury Mariner Hybrid, up from 6.6 according to the old mileage ratings. For the 2007 Honda Accord and Honda Civic hybrids it takes 14.5 and 6.5 years, respectively.
The 2007 Toyota Prius remains a good bargain when compared to a similarly equipped 2007 Toyota Camry — it takes just 1.2 years to break even.
The latest sales figures on hybrids remain strong. Toyota sold 90 percent more gas-electric vehicles during the first two months of 2007 compared to the previous year. And in March 2007, hybrid sales nearly doubled over the previous March. But come summer, attitudes might change. Some consumers seem to have soured a bit on hybrids.
Michael Spath of Jacksonville, Florida, had considered the Prius when he purchased his last car, but he didn’t trust the EPA ratings and decided on the less expensive Toyota Corolla. “It gets the same mileage as the Prius for a heck of a lot less money,” Spath said in an e-mail.
The adjusted fuel-economy ratings make the economics clear. “I would not purchase a hybrid because they are in fact not cost-effective. I really wish they were because I probably would have bought one,” he said.
As previously reported by Wired News, many hybrid owners have experienced fuel economy far below the EPA estimates.
Now, after more than 20 years of producing mileage estimates that were far above what most drivers experienced, the EPA has added new testing procedures that more closely match what the average driver will experience.
The EPA created an online calculator based on the revised testing methodology that generates more realistic expectations for today’s vehicles.
The two top-selling hybrid vehicles, the Prius and Honda’s Civic Hybrid, will lose 12 and 11 miles per gallon respectively from their city driving estimates. Other vehicles are downgraded between 2 and 4 mpg (see chart).
Overall, vehicle city mileage estimates dropped by about 12 percent, and some vehicles are expected to be rated 30 percent lower, according to EPA documents.
The new EPA tests factor in real-world conditions such as speeding, varying weather and lead-footed driving. Vehicles like hybrids with smaller engines pay a higher penalty during the acceleration test, as well as the tests that simulate going up a hill and maintaining highway speeds.
The fuel-economy estimates that appear on 2008 vehicles won’t be based on actual test data, but will be an approximation (as used in EPA’s calculator), according to EPA spokesman John Millett. This year, auto manufacturers can choose whether to run the additional tests, but starting with the 2010 model year, the EPA will require the tests on all new cars, he said.
Hybrid vehicle performance was previously overestimated partly because the tests included vehicles’ idling for long periods, causing many hybrids to shut down their engines to conserve fuel. The old testing methodology registered “a higher fuel economy for hybrid vehicles than is achieved under typical driving conditions,” according to EPA documents.
The new ratings will, on a positive note, end debate about hybrids not performing as advertised, said Dave Alexander, a senior analyst at ABI Research. Conscientious drivers (who brake and start slowly and keep the needle below 60 mph) could even surpass the EPA ratings, he said. “There is potential in the long run for better customer satisfaction.”