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The Moment of Truth - A Crossroad for Hybrid Vehicles

Updated on December 2, 2018
jackclee lm profile image

Jack is currently a volunteer at the Westchester County Archives. Before retiring, he worked at IBM for over 28 years.

Introduction

Just a few short years ago in 2011, the Chev. Volt was touted as the car of the future. It won awards for innovation and best car of the year...The hybrid technology has matured and it is economical and cost effective. The combined global sales was 134,500 units as of 2016. Yet, in 2018, it was announced by GM that they are terminating the production of this vehicle. What happened?

- Nov. 2018

Background

It comes down to government regulations. Believe it or not, the survival of the hybrid was doomed due to its own success. When these vehicles were first to the scene, the incentive was it is good for the environment, reduce CO2 emmissions, and you get a tax credit from our government. The economics of owning a hybrid was sweetened by this tax rebate which amounted up to $7500. It was the good intention of our government to help a fledging industry and at the same time fight climate change. It is a win win scenario.

One small factor of this arrangement is that the tax credit would go away when the manufacture reaches a production level of 200,000 units. Once the tax incentive is reduced or goes away, the demand for these vehicles plumeted.

Other factors also are at play which was not anticipated by our government experts.

First, the advances made on all electric vehicles mainly battery technology has improved both in performance and lower cost.

Second, the fossil fuel industry has renewed supply and the cost of gasoline has remained stubbornly low by all estimates. This is due to fracking technology which allowed the oil drillers to reach new deposits of fossil fuel.

Third, the effects of climate change was exaggerated and over sold. In the past decade, we have seen a failure of dire predictions made back in 1990s. As it turned out, the experts were wrong about the devestating effect of climate change and the time frame. Miami did not fall into the sea as predicted by Al Gore in his award winning documentary.

What To Do Now?

Another little know fact about hybrid technology Is that it is under utilized. Several stories has surfaced that are disturbing to say the least. One police department in California has a fleet of electric vehicles sitting in the parking lot unused and collecting dust. It was a pilot program that allowed these cars to be donated to the department and as it turned out, they were incompatible with the daily usage of the officers. No one wanted to drive it.

Another story is about how some hybrid owners never bothered to charge the cars at night. They just drive it as a regular gas car, defeating the whole purpose.

In engineering, there is always trade offs. When you design a hybrid car, you are combining two different power sources, a gas engine and an electic motor. Anyway you divide this up, it means you will get the compromise of both technologies. It will also cost more to manufacture than either a gas car or an all electric car.

The success of the Tesla Model 3 was the last draw. It is the first mass produced all electric car that competes both in price and performance and driving range with the hybrids.

With the sunseting of the tax credits, no wonder GM decided to end this model 9 short years after its introduction.

Summary and Lessons Learned

This has happened before. We have gone down this path before with electic light bulbs. Our government has a poor record of choosing winners and losers. The hybrid vehicle is just another one. When will they learn? We cannot anticipate the future. These government incentives are just wrinkles in time. They distort the free enterprise system. A better technology will win out due to its own merit, and not because of these tax incentives or government mandates and regulations.

Come to think of it, the same logic against hybrid vehicles apply to all electric vehicles. Are we going to face another crossroad down the line? With EV?

© 2018 Jack Lee

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    • jackclee lm profile imageAUTHOR

      Jack Lee 

      2 weeks ago from Yorktown NY

      Ken, thanks for that analysis. With the Volt being discontinued, I wonder if that will impact the cost of owning a second hand vehicle.

      The savings on gas is definitely an advantage but electricity cost is not free either. Where I live, they are closing down Indian Point nuclear reactor and our electricity cost will be going up accordingly.

      In a nearby shopping center, I saw they installed 12 charging stations for Tesla. These are sitting empty most times. Apparently, it is not free either. Customers of Tesla are charged on average $7 per charge which takes about 25 minutes, to reach 60% capacity.

    • Ken Burgess profile image

      Ken Burgess 

      2 weeks ago from Florida

      Jack,

      I think its more about education, people just don't take the time to figure things out, and if they are not educated about it, they remain clueless.

      People just don't do what is in their best economic interests, as evidenced by how many people don't even have a thousand dollars in the bank saved up for an emergency... we're talking 80% of the nation are ignorant when it comes to personal economics.

      So lets say you have a round-trip to work 5 days a week that is 50 miles or less.

      50 X 5 = 250 miles

      250 / 20 miles per gallon = 12.5

      12.5 gallons x 2.70 = 33.75

      33.75 * 52 = 1755

      Cost of gas to go back and forth to work = $1755 year

      Cost of gas to go back and forth (groceries, errands, etc.)

      for a full year will likely be similar in cost, lets say = $1,250 year

      Cost in gas then for this driver is roughly $3,000 a year not including trips greater than 50 miles.

      A car like a Volt... that cost would be something like $300 rather than $3,000.

      Over the course of 5 years that is a savings of $13,500

      The cost of a used 2014-2016 Chevy Volt with under 50k miles is roughly $13,500 with fees thrown in.

      You could buy a used Chevy Volt, drive it for 5 years, and what you save in gas expenses would pay for the vehicle.

      EVs and Hybrids like the Volt that run on electric first pay for themselves... people just don't take the time to figure it out.

    • Eurofile profile image

      Liz Westwood 

      8 months ago from UK

      In the UK hybrid and electric cars are still more expensive than petrol or diesel ones. Gradually there are more around. Maybe because traditionally our fuel prices are a lot more than yours.

    • jackclee lm profile imageAUTHOR

      Jack Lee 

      8 months ago from Yorktown NY

      Mike,

      According to the Society of Automotive Engineers (SAE) definitions, the Volt is a plug-in hybrid vehicle, due to the combination of an internal combustion engine and two electric motors, along with a battery that can accept off-board energy.

    • Readmikenow profile image

      Readmikenow 

      8 months ago

      Jack, I'd like to point out the Chevy Volt is an all electric vehicle. It is not a hybrid. A hybrid also has a gas powered engine.

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