Design

1. Reason Magazine
Have You Hugged a Hummer Today?
Hybrid vehicles' overall energy costs exceed those of comparable non-
hybrids
Shikha Dalmia
July 19, 2006
Ford Motor Company did itself a huge favor recently by backing away
from its pledge to bump-up its hybrid production ten-fold in four years.
But, as it turns out, the company might have done the planet a whale of a
favor too. Just last fall, CEO Bill Ford was valiantly promising in a mega-
million dollar ad campaign that the company would never, ever turn away
from its hybrid pledge because these vehicles were central to the
company's reputation as an "innovator and environmental steward." Never
mind that at the time Ford was losing $2,000 to $3,000 for every hybrid
it sold because consumers won't pay the entire $6,000 extra that it costs
to produce a hybrid over its gas-powered counterpart. Never mind also
that in the real world — outside of the Environmental Protection Agency's
tax-payer funded testing sites — hybrids don't deliver anywhere close to
the gas mileage that the agency attributes to them, as auto-writer
Richard Burr reported in the Weekly Standard. Bill Ford had given his word
on hybrids and you could take that to the bank (ruptcy court). But hybrids
have received such a thrashing in the market lately that even Ford was
forced to take-off his green eye-shades and read the red-ink on the wall.
According to Art Spinella, the uber-auto analyst and President of CNW
Marketing Research, hybrid sales every month this year have been down
compared to the same time last year. Even sales of the Toyota Prius —
the darling of the greens — have dropped significantly. The only segment
besides taxis where hybrids are still holding steady — taxpayers will be
happy to note — is the car fleets maintained by the government. What's
particularly interesting is that individual consumers are defying all
expectations and turning their backs on hybrids at a time when gas
prices are soaring. (The average U.S. retail price of gas spiked to a record
high of $3.01 last September following hurricane Katrina, and just last
week it hit its second highest price ever at nearly $3.00.) Nor is the
reason all that mysterious. Spinella's customer satisfaction surveys show

2. that 62 percent of hybrid owners are dissatisfied with the fuel-economy
performance of their cars given what they have paid for them. This means
that when gas prices go up, these people don't rush out to buy more
hybrids. "They buy a Chevy Aveo," says Spinella. "It delivers the same fuel
economy as a Prius, but at half the price." Consumer interest might revive
if the cost of hybrids goes down substantially — or the cost of fuel goes
up and stays up for a long period of time, Spinella believes. Until then,
however, the hybrid market is unlikely to come out of the deep freeze, a
reality that even Ford had to finally acknowledge. But despite all these
drawbacks, hybrids are at least better for the environment than
say�.. a Hummer, right? Nope. Spinella spent two years on the
most comprehensive study to date — dubbed "Dust to Dust" — collecting
data on the energy necessary to plan, build, sell, drive and dispose of a
car from the initial conception to scrappage. He even included in the
study such minutia as plant-to-dealer fuel costs of each vehicle,
employee driving distances, and electricity usage per pound of material.
All this data was then boiled down to an "energy cost per mile" figure for
each car (see here and here). Comparing this data, the study concludes
that overall hybrids cost more in terms of overall energy consumed than
comparable non-hybrid vehicles. But even more surprising, smaller
hybrids' energy costs are greater than many large, non-hybrid SUVs. For
instance, the dust-to-dust energy cost of the bunny-sized Honda Civic
hybrid is $3.238 per mile. This is quite a bit more than the $1.949 per
mile that the elephantine Hummer costs. The energy cots of SUVs such as
the Tahoe, Escalade, and Navigator are similarly far less than the Civic
hybrid. As for Ford cars, a Ford Escape hybrid costs $3.2 per mile —
about a third more than the regular Escape. But on the whole, ironically
enough, the dust-to-dust costs of many of the Ford non-hybrids —
Fusion, Milan, Zephyr — are not only lower than comparable Japanese
hybrids — Prius, Accord — but also non-hybrids — Seville, Civic.
Spinella's finding that a Hummer on the whole consumes less energy than
a hybrid than even some smaller hybrids and non-hybrids has infuriated
environmentalists. And on its face it does seem implausible that a gas-
guzzling monster like a Hummer that employs several times more raw
material than a little Prius' could be so much less energy-intensive. But

3. by and large the dust-to-dust energy costs in Spinella's study correlate
with the fanciness of the car — not its size or fuel economy — with the
Rolls Royces and Bentleys consuming gobs of energy and Mazda 3s,
Saturns and Taurus consuming relatively minuscule amounts. As for
Hummers, Spinella explains, the life of these cars averaged across various
models is over 300,000 miles. By contrast, Prius' life — according to
Toyota's own numbers — is 100,000 miles. Furthermore, Hummer is a far
less sophisticated vehicle. Its engine obviously does not have an electric
and gas component as a hybrid's does so it takes much less time and
energy to manufacture. What's more, its main raw ingredient is low-cost
steel, not the exotic light-weights that are exceedingly difficult to make
— and dispose. But the biggest reason why a Hummer's energy use is so
low is that it shares many components with other vehicles and therefore
its design and development energy costs are spread across many cars. It
is not possible to do this with a specialty product like hybrid. All in all,
Spinella insists, the energy costs of disposing a Hummer are 60 percent
less than an average hybrid's and its design and development costs are
80 percent less. One of the most perverse things about U.S. consumers
buying hybrids is that while this might reduce air pollution in their own
cities, they increase pollution — and energy consumption — in Japan and
other Asian countries where these cars are predominantly manufactured.
"In effect, they are exporting pollution and energy consumption," Spinella
says. But while the environment has dodged Ford's hybrid foray, Toyota
has shown no planetary concerns. It is going full throttle ahead with its
plan of putting one million hybrids on the road by the end of the decade.
Nor is there much hope that it will back-off in the near future given that
it has already sunk $2 billion just in hybrid-related research and
development, Spinella points out. Ironically Ford and some of the other
car makers' exit from the hybrid segment means that Toyota will be able
to consolidate its domination in it even more. Thus the only hope of
prodding Toyota to get out of the hybrid business would be if its
customers jumped off the Prius bandwagon and embraced non-hybrids
— even Hummers — instead. Now here's a catchy slogan for the next
Save the Earth campaign: Have you hugged a Hummer today?

4. Shikha Dalmia is a senior policy analyst at Reason Foundation. An archive of her work is here and
Reason's environment research and commentary is here. - See more at:
http://reason.org/news/show/have-you-hugged-a-hummer-today#sthash.hqywvHDx.dpuf