It looks obvious

“Things should be made as simple as possible, but no simpler.” — Albert Einstein

Is it more efficient?

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John decided to give a chance to hybrid car, not because of the environment but because he believed the promises that it will save him money. However when he calculated the actual numbers, he found that:

When it will take 8 or 9 years to make up the difference in the cost of getting a hybrid over a traditional engine, it really will not make much sense to most consumers. If you are like me, you don’t have that kind of extra money to put up front and can’t wait that long to recoup the cost.

I can already here those who would suggest tempering with the incentive by playing with the taxes, which isn’t really changing the reality - just shift the costs somewhere else (kind of hiding the dirt under the carpet).

 

It is reminding me an argument my wife had once with a friend of her about organic food. When my wife argued that the idea of feeding the entire world with organic food is problematic since the method of producing organic food are inefficient her friend answered: " It isn’t inefficient, it just more expensive"….

 

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Written by Rogel

July 24th, 2007 at 10:30 am

Posted in The Free Market

« My choice of fantasy
Encouraging numbers »

Viewing 11 Comments

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    He might also look into lower insurance rates for hybrid drivers.  Also, some states are offering rebates or other tax incentives to those who buy a hybrid car.  Then there's solo access to HOV lanes or free parking.  It all depends on which state you're in, but the time to break even on the extra money varies widely on how much you take advantage of these types of incentives.

    It also depends on what the 'other' car is in your scenario, i.e. the price of the other car and its fuel economy.  
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    It didn't take long before you brought the tax incentives. Didn't I say that the tax incentive are just hidden cost? But even all your arguments are correct it wouldn't make the purchase of hybrid car worth the expense in reasonable time, would it?<div>I don't claim that hybrid car is a bad idea, but it seems that it still not a mature technology. </div>
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    I've seen studies saying it can take as little as 2 to 3 years to make up the cost difference. Again, it depends on which hybrid car you're buying and which car is your alternative.

    As for 'hidden costs,' I'm not sure I follow you.
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    Tax incentive simply moves some of the cost to someone else. However since you, the tax payer, is the one paying for the incentive (through your taxes) you are not really saving. <div>In addition, hiding some of the cost through tax incentive, doesn't make the car itself more efficient. I strongly oppose subsidies, tax incentive and other bad intervention types of the government in the free market, so it will be difficult to convince me that hybrid car is cost effective by including such factors in. </div><div>Let me make it crystal clear - I have no ideological reason against hybrid cars. I only suggest that the technology is not yet ready for mass market. I also wonder if we will remove government incentive hybrid cars will be the best solution. </div>
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    I would suggest looking at what Toyota has done since their incentives ran out. They are still selling 3 out of every 4 hybrids in the US, despite losing their tax credits.    Hybrid Car Sales, June.
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    Your wife's friend sounds like an intelligent person. Costs are not merely the outcome of fiscal calculation. Consumers of private transportation are typically narrow minded (present company excluded, of course, as this could never happen to us, right?). The cost of automobile usage and petrol consumption is far greater than what the gas-per-gallon equationalists (my own word for those, mostly economists and engineers of various sorts and sizes, who find is difficult to understand the world without narrowing it down to a few, often non representative, variables which can be neatly arranged in mathematical order) would have you believe. Logic, and quality of life, is not limited to your pocket… the air you breath, food you eat, water you drink, soil you walk on and depend on for nurture (not to mention your quality of life which is highly effected by environmental surroundings)… all these are complex, often difficult, factors to calculate. But they add up (you can replace the word "add" with "sum" if you want to make the equationalists happy). Whether hybrid cars are "worth it or not" is just marginally the outcome of consumer petrol costs.
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    You cannot ignore the connection between cost and efficiency. The direct price isn't all that should fall under the lable cost, but it is major part of it. The fact is that current technology of car's manufacturing is less efficient in building an alternative - and that hybrid cars manufacturing doesn't provide an efficient solution. You might also want to compare the price with the manufacturing efforts and you might be surprize how much fuel was used during manufacuring - compare with regular cars.
    It is one mistake to claim the ecenomic is the silver bullet for every issue. It is another mistake to choose to ignore it...
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    Is the direct cost to private consumers actually "a big" part of it? I have no idea what manufacturing costs are. You might have a very valid point. But, that aside for a moment, is the price of petrol for the individual consumer really the big issue? Is it more important than environmental concerns? My problem with the sort of analysis you provide isn't whether it costs more or less, thus influencing "efficiency". It's with the entire concept of narrow minded efficiency. True, if you (not you in person… some John Doe) are certain that that sun shines up your ass (sorry for the terminology), then shoving you're head way up there will certainly show you the light. But, viewing your own asshole as the source of all light, or your private petrol budget as the primary factor in the (much needed) world wide effort to limit the drilling, burning, and general usage of oil… that's just silly. Narrow minded too.Again, this isn't a criticism about you in person. There are far greater assholes for me to attack out there… you're just poorly placed where I can get at you.  
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    Firstly I do not take your remarks personally I rather enjoy the crude terminology. I guess when the argument is rather weak a lot of noise is a fair tactic to cover it. <div>I said it before, and I'll repeat it again - I have no problem with Hybrid Cars! however it seems to me that the technology is not as ready for mass market as some people would like to believe. The cost is a very good indicator of the efficiency of the process and it indicate that the manufacturing is less efficient than other option available. You cannot ignore the cost factor when you are trying to deploy something to the mass market, after all someone will have to pay the differences. </div>
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    I have no argument with the fact that prices will need to be paid for. I do think that the individual petrol costs are the weakest argument of all (for & against) in the struggle to reduce oil usage. If you think this is a week argument, I sure hope my children (and yours) live in a better environment than that left behind after you (and the like) have finished adding up your pennies. It's not about the value of petrol, transportation, heat… etc… It's about the value of our planet. Perhaps hybrids are not the solution. In either case, hybrids in and of themselves are of no interest. The debate should not focus on individual expenditure… Rather, I'd like to see it revolve around mutual natural resources. Opps, I forgot. Markets don't believe in collective value. Too bad we can't each live on an individual planet, and have that all mighty "invisible hand" you like so much deliver pizza to our doors.
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    You surprise me, but I can i can attribute it to pain...<div>I have nothing against hybrid cars, and I wrote so several times. All what I said is that it might not be ready for mass market. </div><div>I actually can argue, although I didn't think this is the issue here, that the free market as a system will generate a better solution and not one that being enforce by government. A great example for government promoted solution is the ethanol, which is a non-solution all together.  An solution can emerge only if someone will see it as its interest to develop it, and the ward profit is a beautiful ward - it represent a reward for real value. But will still have long way with you... :)</div>

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