When does a hybrid powerplant make sense?

[dwightlooi]

If you subscribe to the "Global Warming" Hypothesis and will like to purchase a low CO2 emitting vehicle because you believe that the current but of global climate change is abnormal and androgynous, and want to do your part to change, that skip this post. This is about the economics of Hybrids, not their affinity to the aforementioned environmental activism rally cry.

Mild Hybrids -- 11.2 years to break even on investment

The Mild Hybrid uses a overpowered alternator motor or a similar arrangement to create an ~2mpg (based on Chevy Mailbu numbers) advantage over a conventional engine by shutting down the engine while idling, and for a small amount of power assist and regenerative braking (~3hp worth). The system incurs a $1000 premium over conventional power trains of similar performance.

Assumption: 12,500 miles per year driven (blue book zero adjustment annual mileage)

Assumption: $3.00 / gallon gasoline cost

Assumption: 28mpg on conventional mid-size car

Assumption: 30mpg on hybrid mid-size car

Annual fuel cost on conventional car = 12500/28 x 3 = ~$1339

Annual Fuel cost on Hybrid car = 12500/30 x 3 = ~$1250

Annual fuel savings through hybrid adoption = 1339-1250 = $89

Years needed to break even on investment (assuming zero additional maintenance costs for hybrid drivetrain) = 1000/89 = 11.2 years

Parallel Hybrids -- 10.6 years break even on investment

The typical hybrid (ala Prius) incurs a $4500 premium over a similar vehicle with a conventional power train. A Prius for example is about $22.5K (base) whereas an optioned out Corolla is about $18K; a Camry or Altima Hybrid is also roughly $4.5K more than their similarly equipped 4-cylinder counterparts. The cost savings from the hybrid powertrain amounts to about 16 mpg in typical combined driving (based on 26/35 mpg on a Corolla vs 45/48mpg on a Prius). This is a significant improvement. But when does it make economic sense? Let's do the math.

Assumption: 12,500 miles per year driven (blue book zero adjustment annual mileage)

Assumption: $3.00 / gallon gasoline cost

Assumption: 30.5mpg on conventional economy car

Assumption: 46.5mpg on hybrid economy car

Annual fuel cost on conventional car = 12500/30.5 x 3 = ~$1230

Annual Fuel cost on Hybrid car = 12500/46.5 x 3 = ~$806

Annual fuel savings through hybrid adoption = 1230-806 = $424

Years needed to break even on investment (assuming zero additional maintenance costs for hybrid drivetrain) = 4500/424 = 10.6 years

Series Hybrids -- 22.4 years to break even on investment

A series hybrid like the upcoming Volt should allow 30~40 miles of driving on battery power alone. It should also have enough gasoline powered range to extend the maximum unrefueled/unrecharged range to about 300 miles. Unfortunately, the price premium is closer to $15,000 over conventional.

Assumption: 12,500 miles per year driven (blue book zero adjustment annual mileage)

Assumption: 260 commute days (52 weeks x 5 days)

Assumption: $3.00 / gallon gasoline cost

Assumption: $0.33/hour for recharging (220V x 15amps @ 11 cents/kilowatt hour; national average electrical rates)

Assumption: 3 hour recharge cycle on 220v outlet

Assumption: 46.5mpg in hybrid mode

Assumption: 30 miles electric range

Annual fuel cost on conventional car = 12500/30.5 x 3 = ~$1230

Annual electric cost on Series Hybrid car = 260 x 0.99 + (12500-260x30) x 3 = ~$257

Annual fuel cost on Series Hybrid car = (12500 - 260x30)/46.5 x 3 = ~$303

Annual fuel savings through hybrid adoption = 1230-(257+303) = $670

Years needed to break even on investment (assuming zero additional maintenance costs for hybrid drivetrain) = 15000/670 = ~22.4 years

Conclusions:-

(1) With today's price of hybrid technologies, and assuming an average 5 year (original) ownership period for a new car, a mild/parallel hybrid will break even for the new car buyer when gas prices are $6 a gallon. They will start to make a return on investment equivalent to the invested amount at $13 a gallon.

(2) For Hybrid drive trains to break even economically for the average buyer at $3/gallon, Hybrid drive train costsdeltas over a conventional drive train has to be reduced by 50% for mild and parallel hybrids and 75% for series hybrids. If a equivalent return on investment is desired, mild and parallel hybrids have to be reduced in price by 75% and Series hybrids by 87.5%.

[PurdueGuy]

Of course the issue is how reliable your assumptions are.

Price of fuel: I personally have doubts that gas will stay under, at, or near $3 a gallon for more than the next 3-6 months tops. We have spent a lot of time around $3.50 and higher, and I expect the oil companies will shift the price back in that range here shortly.

MPG advantage: your numbers look about right for the malibu/aura hybrid, but the mild hybrid system in the vue GL has shown a larger % improvement IIRC. Also, there should be the next gen system coming out soon. I would say your numbers are very reasonable for today, but may become outdated soon.

Another nitpicky thing: in these types of calculations, I prefer to set them up so a person can take a guess at their own average annual mileage and find out the real years. Some people drive crazy high miles each year, and the vehicle would pay for itself quite quickly.

Another good measure is the mileage of the vehicle when it breaks even. I once did similar calculations for the Prius (I forget my assumptions), and it wouldn't break even (according to my #s, which may be outdated now) until about 225k miles. Due to the likelihood of expensive repairs and the fact that the car will be pretty well worn out by then, it was a simple conclusion that it simply didn't pay for itself. If the car's cost will go up another several grand due to a new battery pack before it even pays for itself, it will never break even.

Big props for taking the time to punch the numbers, though! Don't take my picky critiques as a put-down, I really wish more shoppers would take the time to research & punch the numbers themselves. Many of the hybrids don't make sense until past $4 a gallon gas, and sometimes quite far past that.

[dwightlooi]

Of course the issue is how reliable your assumptions are.

Price of fuel: I personally have doubts that gas will stay under, at, or near $3 a gallon for more than the next 3-6 months tops. We have spent a lot of time around $3.50 and higher, and I expect the oil companies will shift the price back in that range here shortly.

I am not quite as pessimistic about oil. IMHO, what doesn't make sense is $4/gal gasoline prices not $2 per gallon ones. There is no shortage of oil and no reason for $140/barrel crude prices other than speculative pressures and the somewhat nonsensical shift towards oil as a hedge against inflation and currency devaluation. I believe that $70~85/barrel is the long term sustainable crude price. And, gas prices at $2.20~2.40 a gallon should be a sustainable average over the next decade (maybe even a tad under $2 if the dollar strengthens). However, I used $3 has a measuring stick to be conservative.

But, your point is well taken. Years may not be a good measurement because years to break end will vary depending of miles per year driven! Well, according to the same assumptions, a parallel hybrid (ala Prius) will break even at 130,000~140,000 miles.

Edited November 13, 2008 by dwightlooi

[Drew Dowdell]

These numbers should always be calculated in miles not years. 12,500 miles in a year was a very light year for me.

[siegen]

It's difficult to compare the Prius and Corolla, because the Prius is a larger and "higher end" car than the Corolla, so you're getting more than just better mileage (supposedly). Try comparing the Civic and Civic hybrid, Camry and Camry hybrid, and Escape and Escape hybrid, and see what you get.

Edmunds, I think, compared the Prius to the Fit, and then later the Civic Hybrid to the Fit. In both instances the Fit's versatility and price won over the hybrids, in their opinion. I still think hybrids have a ways to go to make more economic sense, but they're close. I think the new Insight, which is said to only have a $2,000 price premium for the hybrid components of it, will make more economic sense than current hybrids.

[pow]

It's difficult to compare the Prius and Corolla, because the Prius is a larger and "higher end" car than the Corolla, so you're getting more than just better mileage (supposedly). Try comparing the Civic and Civic hybrid, Camry and Camry hybrid, and Escape and Escape hybrid, and see what you get.

Edmunds, I think, compared the Prius to the Fit, and then later the Civic Hybrid to the Fit. In both instances the Fit's versatility and price won over the hybrids, in their opinion. I still think hybrids have a ways to go to make more economic sense, but they're close. I think the new Insight, which is said to only have a $2,000 price premium for the hybrid components of it, will make more economic sense than current hybrids.

Most hybrids tend to be more powerful than their non-hybrid counterpart.

For most consumers looking at a Camry LE I-4, upgrading to a Camry Hybrid makes more "sense" than upgrading to a Camry V-6.

Camry Hybrid -- 3.017647201 years to start saving money

Assumption: 260 commute days (52 weeks x 5 days)

Assumption: 10 acceleration runs (0-100 mph) per day

Assumption: 19.6 seconds, 0-100 mph hybrid acceleration (C&D)

Assumption: $100 / hour owner's income

Annual time savings through hybrid "adoption" = $505.56

Annual fuel savings through hybrid "adoption" = $322.90

Net savings = $828.46 / year

Camry LE V6 -- 6.450946999 years to start saving money

Assumption: 260 commute days (52 weeks x 5 days)

Assumption: 10 acceleration runs (0-100 mph) per day

Assumption: 14.5 seconds, 0-100 mph hybrid acceleration (C&D)

Assumption: $100 / hour owner's income

Annual time savings through V6 "adoption" = $873.88

Annual fuel savings through V6 "adoption" = ($476.34)

Net savings = $387.54 / year

[pow]

If you subscribe to the "Global Warming" Hypothesis and will like to purchase a low CO2 emitting vehicle because you believe that the current but of global climate change is abnormal and androgynous

Climate change is, clearly, male.

[loki]

could a comparison be done for a similar HP vehicle? would an accord 4 cyl be comparable to the mild malibu?

or by interior room? is an aveo hatch close to the room of a prius?

or if it's just looking at basic transportation. compare an aveo, kia something or heck, a slightly used ~4 year old car, to one of these? lol

[Hopeful for GM's Future]

If you subscribe to the "Global Warming" Hypothesis and will like to purchase a low CO2 emitting vehicle because you believe that the current but of global climate change is abnormal and androgynous, and want to do your part to change, that skip this post. This is about the economics of Hybrids, not their affinity to the aforementioned environmental activism rally cry.

Mild Hybrids -- 11.2 years to break even on investment

The Mild Hybrid uses a overpowered alternator motor or a similar arrangement to create an ~2mpg (based on Chevy Mailbu numbers) advantage over a conventional engine by shutting down the engine while idling, and for a small amount of power assist and regenerative braking (~3hp worth). The system incurs a $1000 premium over conventional power trains of similar performance.

Assumption: 12,500 miles per year driven (blue book zero adjustment annual mileage)

Assumption: $3.00 / gallon gasoline cost

Assumption: 28mpg on conventional mid-size car

Assumption: 30mpg on hybrid mid-size car

Annual fuel cost on conventional car = 12500/28 x 3 = ~$1339

Annual Fuel cost on Hybrid car = 12500/30 x 3 = ~$1250

Annual fuel savings through hybrid adoption = 1339-1250 = $89

Years needed to break even on investment (assuming zero additional maintenance costs for hybrid drivetrain) = 1000/89 = 11.2 years

Parallel Hybrids -- 10.6 years break even on investment

The typical hybrid (ala Prius) incurs a $4500 premium over a similar vehicle with a conventional power train. A Prius for example is about $22.5K (base) whereas an optioned out Corolla is about $18K; a Camry or Altima Hybrid is also roughly $4.5K more than their similarly equipped 4-cylinder counterparts. The cost savings from the hybrid powertrain amounts to about 16 mpg in typical combined driving (based on 26/35 mpg on a Corolla vs 45/48mpg on a Prius). This is a significant improvement. But when does it make economic sense? Let's do the math.

Assumption: 12,500 miles per year driven (blue book zero adjustment annual mileage)

Assumption: $3.00 / gallon gasoline cost

Assumption: 30.5mpg on conventional economy car

Assumption: 46.5mpg on hybrid economy car

Annual fuel cost on conventional car = 12500/30.5 x 3 = ~$1230

Annual Fuel cost on Hybrid car = 12500/46.5 x 3 = ~$806

Annual fuel savings through hybrid adoption = 1230-806 = $424

Years needed to break even on investment (assuming zero additional maintenance costs for hybrid drivetrain) = 4500/424 = 10.6 years

Series Hybrids -- 22.4 years to break even on investment

A series hybrid like the upcoming Volt should allow 30~40 miles of driving on battery power alone. It should also have enough gasoline powered range to extend the maximum unrefueled/unrecharged range to about 300 miles. Unfortunately, the price premium is closer to $15,000 over conventional.

Assumption: 12,500 miles per year driven (blue book zero adjustment annual mileage)

Assumption: 260 commute days (52 weeks x 5 days)

Assumption: $3.00 / gallon gasoline cost

Assumption: $0.33/hour for recharging (220V x 15amps @ 11 cents/kilowatt hour; national average electrical rates)

Assumption: 3 hour recharge cycle on 220v outlet

Assumption: 46.5mpg in hybrid mode

Assumption: 30 miles electric range

Annual fuel cost on conventional car = 12500/30.5 x 3 = ~$1230

Annual electric cost on Series Hybrid car = 260 x 0.99 + (12500-260x30) x 3 = ~$257

Annual fuel cost on Series Hybrid car = (12500 - 260x30)/46.5 x 3 = ~$303

Annual fuel savings through hybrid adoption = 1230-(257+303) = $670

Years needed to break even on investment (assuming zero additional maintenance costs for hybrid drivetrain) = 15000/670 = ~22.4 years

Conclusions:-

(1) With today's price of hybrid technologies, and assuming an average 5 year (original) ownership period for a new car, a mild/parallel hybrid will break even for the new car buyer when gas prices are $6 a gallon. They will start to make a return on investment equivalent to the invested amount at $13 a gallon.

(2) For Hybrid drive trains to break even economically for the average buyer at $3/gallon, Hybrid drive train costsdeltas over a conventional drive train has to be reduced by 50% for mild and parallel hybrids and 75% for series hybrids. If a equivalent return on investment is desired, mild and parallel hybrids have to be reduced in price by 75% and Series hybrids by 87.5%.

I think the major selling point for people wanting these cars initially will be NVH rather than economy.

I am not a rich man but the idea of all electric propulsion appeals to me due to the quietness, smoothness and torque.

You also have to consider that eventually the price on the batteries used for these cars will drop down quite a bit in the future. http://www.technologyreview.com/energy/22188/

Edited February 27, 2009 by Hopeful for GM's Future

[Hopeful for GM's Future]

Series Hybrids -- 22.4 years to break even on investment

A series hybrid like the upcoming Volt should allow 30~40 miles of driving on battery power alone. It should also have enough gasoline powered range to extend the maximum unrefueled/unrecharged range to about 300 miles. Unfortunately, the price premium is closer to $15,000 over conventional.

Assumption: 12,500 miles per year driven (blue book zero adjustment annual mileage)

Assumption: 260 commute days (52 weeks x 5 days)

Assumption: $3.00 / gallon gasoline cost

Assumption: $0.33/hour for recharging (220V x 15amps @ 11 cents/kilowatt hour; national average electrical rates)

Assumption: 3 hour recharge cycle on 220v outlet

Assumption: 46.5mpg in hybrid mode

Assumption: 30 miles electric range

Annual fuel cost on conventional car = 12500/30.5 x 3 = ~$1230

Annual electric cost on Series Hybrid car = 260 x 0.99 + (12500-260x30) x 3 = ~$257

Annual fuel cost on Series Hybrid car = (12500 - 260x30)/46.5 x 3 = ~$303

Annual fuel savings through hybrid adoption = 1230-(257+303) = $670

Years needed to break even on investment (assuming zero additional maintenance costs for hybrid drivetrain) = 15000/670 = ~22.4 years

Dwight,

Just wondering if you think their would be any advantages to using HCCI in a series hybrid configuration vs a non-hybrid (conventional drivetrain) configuration?

Wouldn't having the ICE connected purely to a battery (and not directly to the tires through gears and differential) make using HCCI easier? I thought HCCI worked best in low load situations?

[dwightlooi]

Dwight,

Just wondering if you think their would be any advantages to using HCCI in a series hybrid configuration vs a non-hybrid (conventional drivetrain) configuration?

Wouldn't having the ICE connected purely to a battery (and not directly to the tires through gears and differential) make using HCCI easier? I thought HCCI worked best in low load situations?

Well... the short anser is that it will make HCCI easier to achieve and maintain. However, HCCI employment will also yield much less efficiency improvement in a series hybrid compared to a parallel hybrid or conventional power train.

The long answer is that the HCCI's principal goal is to make a gasoline engine more like a diesel engine to increase its efficiency. A diesel engine is more efficient for three reasons...

• The spontaneous conflagration achieved in a diesel engine's burns fuel more efficiently than the spark triggered flame front light off in a gasoline engine.
• The diesel engine has higher compression ratios (18~22:1 vs 9~12:1 for Naturally Aspirated engines)
• The diesel engine runs has no throttle body choking the engine at any time and operates simply by running the same air charge lean at part "throttle", hence affording lower pumping loses.

In a Series Hybrid, the engine can be designed to run at full load, WOT or not at all. As such, the ability to eliminate throttle butterfly induced part power pumping losses is moot. And, since gasoline HCCI is currently unachievable at full load running conditions the benefits may only be in increasing efficiency during the brief periods when the engine revs up and down from its optimal, constant operating speed. Another alternative is to use a larger displacement engine and only operate it at 20~40% power, but in HCCI mode. However, the larger displacement engine is also bigger, heavier and thirstier to begin with. So in the end it may not be worthwhile to implement HCCI in a series hybrid like the Volt.

If ultimate in efficiency is the goal, just run a series hybrid with a real diesel engine! If gasoline fuel is a must then an Atkinson or Miller Cycle power plant makes sense.