While at my parents' house for Easter, Dad read this headline from the Chicago Tribune to me over breakfast: "Gas price run-up not turning tide for hybrid SUVs."  He went on to summarize the article, which says that gas-electric hybrid SUVs like the Ford Escape Hybrid and the Toyota Highlander Hybrid are becoming dealer inventory headaches compared to the likes of the new Chevy Tahoe.  Evidently, people don't want to spend another $3-4K (and $10,000 over the price of comparable vehicles produced by other manufacturers) just to get the hybrid technology, particularly since the gas savings isn't really all that stellar (to be conservative, let's say 10% or so). Then we started chatting about the increasing criticism of hybrids in general, and while it's not surprising, the criticism is disheartening considering rising gas prices, among other issues.

Hybrid technology is more of a "needs of the many outweigh the needs of the few" technology.  If they were about the individual consumer, hybrids might have never happened.  Execs like Nissan's Carlos Ghosn and BMW's Helmut Panke are being dragged, kicking and screaming, into the hybrid arena, but they're going there nonetheless.  Here's why hybrids are a good idea:

1. Gas savings.  Sure, maybe you only save $10 bucks for every $100 and it takes 10 years or whatever for you to make back the $4K premium you paid to have the little "hybrid" logo on the back of your car, but think about it on a macro level -- say there are a million hybrid vehicles on the road today. If each of them are saving 10% over the fuel used by a comparable all-gasoline vehicle, that's a lot of gas we're NOT buying from foreign countries. This might not be a big deal for the individual consumer, but it is a huge deal for the world's dependence on oil.

2. Corporate brand equity.  Toyota has "gas guzzling SUVs" too (though all things being relative the mileage isn't that bad), but if you put a GM logo next to a Toyota logo and ask a random guy on the street which corporation is the more environmentally responsible one, Toyota will get a nod, mostly due to its production of the Prius, nevermind the fact that the GM hybrid SUVs coming to a dealership near you will save more gallons of gas than a Prius.  Being an environmentally responsible corporation these days is a powerful label to have.

3. Personal brand equity: Some people like to be labeled as environmentalists. They get off on having that little "hybrid" logo on the back of their car so they can be viewed as environmentally responsible people. In other words, don't underestimate the power of vanity. Alternatively, there are people who believe that buying a hybrid can help save the environment. Don't understimate the power of conviction, either.

4. Hybrid technology is in its infancy, and it needs to be supported like any other new technology.  Where would we be if somebody took a look at one of those 1970s computers that took up an entire conference room and said, "damn, that thing is more trouble than it's worth, I think I'll stick with my legal pad." Sure we're only getting 10% fuel savings now and it's not cost-effective for the individual consumer, but that doesn't mean we should trash the idea -- it can only get better. Soon we'll have 50% fuel savings, cheap replacement batteries and a situation where hybrids are cost-effective for the individual consumer.

5. The hydrogen economy isn't going to be here until at least 2020. Fuel cell vehicles are great and everything, but they're not commercially viable. And when you get your shiny new fuel cell vehicle, exactly where are you going to fill it up? Hydrogen isn't that readily available, and we need some mad infrastructure improvements (i.e. adding a hydrogen pump at your local Marathon) before we can even hope to add fuel cell vehicles into every day life. Hybrids are a good alternative right now because the fuel is already available.

Hybrids aren't the only answer, however. Diesel provides similar savings without needing to invest in new technology to the same extent. Cylinder deactivation, while the fuel savings isn't as significant, also doesn't require the same investment or maintenance as a hybrid. Continuously variable transmission also provides savings that, on a macro level, will help reduce our dependence on foreign oil. We shouldn't put all of our eggs into the hybrid basket, of course, but critics should also start looking at hybrids from a macro level instead of savings for individual consumers. Why must we choose between diesel and hybrids, anyway?


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