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Are Hybrid Cars Cost Effective?
Hybrid cars are currently flooding the U.S. market and have just started trickling in to India. The only hybrids on the cards for India in the near future include the Mahindra Scorpio, the Honda Civic Hybrid, the Toyota Prius and the recently launched 8th generation partially hybrid Honda Accord with an E10 engine that supports 10 percent ethanol in the fuel.
Even though the U.S. has seen a flurry of new buyers go for hybrid cars, if it is affordable to the person, the same trend has not continued in India. Most Indians are yet to subscribe to the idea of hybrids and the main reason behind this indecision is the cost effectiveness of such cars.
Car manufacturers are pushing the theory that the low running cost of a Hybrid car makes up for the difference in cost along with saving the environment. This means that even though the payment is high initially while purchasing the car, the costs for running the car become substantially lower. Listed are a few reasons that manufacturers call hybrid cars as important:
- The dependency on petrol is low in Hybrids. It derives energy from various cheaper sources like bio-fuels, ethanol, electricity and others, hence running costs are low.
- It has low emission levels and hence a cleaner climate is assured. It does not contribute to global warming. It is an environmentally friendly car.
- It delivers an excellent fuel economy. It is believed to be nearly 25-30 percent better than petrol cars. Hence you can save on fuel expenditure.
Hybrid cars are costlier than both petrol and diesel powered cars. Considering a base variant, a Honda Civic Hybrid will cost more than Rs 18 Lakh in India (as an imported model), while a petrol run Honda Civic costs close to Rs 12 Lakh on road – a clear difference of Rs 6 Lakh. This means that the extra premium of 6 lakhs on the hybrid car has to be justified in low running costs. Comparing fuel efficiency of a petrol-run Civic and a Civic Hybrid, it is found that the city/highway mileage of Civic petrol is 10/12 km/l and that of a Civic Hybrid is 17/19 km/l. This means that fuel efficiency increases by 7 km/l in this case.
Now assuming that the owner of a petrol-run Civic is spending Rs 5000 on fuel per month, the running cost for this owner should decrease to Rs 2940 on purchase of a Civic Hybrid car based on the fuel efficiency calculations. This means that the owner should be saving Rs 2060 per month. In one year, the owner saves Rs 24720. This means that the owner will be able to make up the initial Rs 6 Lakh premium cost of the car in close to 24 years and 3 months of low running costs. That is a long period of time!
In a country where affordability and low running costs are closely scrutinized, petrol and diesel cars in the market may not see much change when hybrids enter India. However, for those people who are genuinely more concerned about the environment and the ever-growing problems of global warming, hybrid cars is the way to go.
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