5 things to know before going hybrid or electric
Considering cost, gas and and how environmentally friendly to be
The following article is part of Upshift, a new series about automobile industry trends. Presented by Chase Auto Finance, these stories will inspire you to discover your next car and can be found across the Condé Nast Media Network, in WIRED and Condé Nast Traveler.
Contemplating hybrid or electric technology in your next car? You're not alone. In a survey, 59 percent of Gen Y consumers said they expect to be driving some kind of alternative fuel-based car by 2019. Since 2014, consumer interest in electric cars has quickly grown, outpacing that of hybrids in their first years on the market, according to the Consumer Federation of America. And design-minded electric vehicles like Tesla and the Jaguar I Pace, set to launch in 2018, dominate industry buzz.
Still, market share of both car types is low. In 2015, hybrids, which use a combination of internal combustion and electric motors, made up just 2.2 percent of overall new car sales, while sales of electric vehicles (EV), which are powered by battery, hovered below 1 percent. That may be due to sticker shock: Hybrids generally cost 20 percent more than vehicles with standard engines. And EVs can cost as much as 70 percent more before incentives.
But there are some reasons to join the green revolution. If you're headed that way, here are five key factors to consider:
1. The price of gas
With gas prices low, there's less demand for alternative fuel cars. And demand affects their development and availability. Subaru announced it would end production of its Crosstrek hybrid, though they said they will begin again when it makes sense financially. "It's a tough sector with gas prices so low, once you get past the diehards," said Michael McHale, a spokesman for Subaru.
But keep an eye on that fuel cost. In late 2016, the Organization of Petroleum Exporting Countries announced it will decrease production of oil, which ought to cause the price of gas to rise. If you buy now—the average American keeps her car for 11.5 years—you'll have the car long enough to see several shifts in the price of gas. In other words, you may pass on a hybrid car while the price of petrol is low, only to watch gas hit $5 a gallon, as it did in California in 2012.
2. Your mileage math
If you drive enough, the fuel savings of a hybrid may cover the extra cost of the car. Even if gas stays at around $2.50 a gallon. Say you drive 10,000 miles a year, the low end of average, then switching from an SUV to a hybrid hatchback can save you roughly $265 a year, or $7,187 over the car's lifetime.
If you compare an EV to a typical car, the math is even more favorable. The least expensive rings in at $22,995. But, charging during off-peak hours, it costs as little as $3 to "fill up." That EV can get the equivalent of over 100 miles per gallon. Brendan Flynn, vice president of communications and strategic partnerships for CarLabs, leases a Fiat 500e electric car for $190 a month, which is roughly what he spent on gas with his old car. He said the effect on his electric bill is negligible, he says. "Maybe it's up $25, but it's so nominal that I haven't paid attention," says Flynn.
3. The cost of batteries
The main culprit behind EV's high price tag is the battery. Lithium ion batteries account for a third of the cost of the vehicle, according to an analysis by Bloomberg New Energy Finance. While development isn't at the pace we've seen with computers, there is some incremental improvement in batteries. Last year, prices dropped 35 percent. Within the next six years, as more companies invest in battery engineering, EV could become as affordable as gas-fueled cars, according to Bloomberg.
Still, batteries will be costly to replace. A replacement Tesla Roadster pack will currently set you back $29,000. With technology still nascent, it's hard to predict how long EV car batteries will last. But one study showed that Tesla's Roadster battery pack still retains 80 to 85 percent of its original capacity after 100,000 miles. And consider, you'll be saving on other car maintenance costs—no more oil changes, tune-ups, replaced mufflers or catalytic converters.
4. Federal and state incentives
Don't forget that, at the moment, the federal government offers subsidies—up to $7,500—to persuade drivers to make the switch in an effort to reduce carbon emissions and create green collar jobs.
States often offer their own incentives too. Coloradoans get top dollar back, with a $5,000 state credit. But California isn't too shabby—CarLabs' Flynn got a check for $2,500 when he leased his Fiat. (Since it's a lease, Fiat took the federal incentive.) And the Golden State sweetens the deal by giving EV drivers access to carpool lanes.
5. The environment
Economics aside, you're probably considering EV or hybrids because you want to cruise with a clean conscious, knowing you're not pouring carbon dioxide into the sky like the gas guzzlers in the other lane, right?
Well, not so fast. EVs and hybrids are only as green as their power source. If it's not coming out of your tailpipe, it may be coming out of a smokestack. As a result, a Toyota Prius hybrid and the Nissan Leaf EV both produce about the same amount of greenhouse gas pollution, 200 grans per mile, according to the US Department of Energy.
In areas of the country like the Midwest, where coal-fired power plants provide the bulk of electricity, driving an EV can be worse for the planet than driving a gas-powered vehicle.
However, if you're in California or Texas, where a high proportion of energy is drawn from renewable sources, the impact can be as low as 100 grams per mile.
Of course you can drive your way to zero carbon footprint. Just start saving for a solar-powered charging station.
Todd Wasserman is a Chase contributing writer.