Should I Buy a Hybrid or an Electric Vehicle? (Part V): Mileage and Fuel Sensitivity Analysis

Yesterday I concluded that purchasing a Toyota Corolla was the most economically efficient decision given my circumstances. However, I also suggested that it still might make sense to purchase a Prius under certain conditions.

It turns out that buying a Prius makes sense if I were to use the vehicle for 20,000 or more miles annually, and if gasoline prices remained at or above $4.00. The following table shows the time to breakeven in years for a Prius at various gas prices and annual miles. The chart highlights the results in yellow when the time to breakeven is less than 10 years.

©2011 Reflections of a Rational Republican

It never makes sense to purchase a Tesla Roadster.

©2011 Reflections of a Rational Republican

It is important to note that this analysis assumes a constant marginal electricity cost of $0.40 per kWh

It also makes never makes sense to buy a Chevy Volt.

To be fair, my analysis assumes that I will always use both gas and electricity to power the Volt. However, it does not account for any behavioral changes associated with higher gas prices. For instance, once gasoline prices reach a certain point, users will stop using gasoline and, instead, rely entirely on battery power by limiting their average distance per trip to remain in electric-only mode. I may include this important nuance in future analyses for the Volt so that my conclusions are a bit more realistic.

©2011 Reflections of a Rational Republican

The Nissan Leaf has the most binary outcome.

At low gas prices, the Leaf never breaks even. However, at extremely high gasoline prices, it takes fewer than two years to cover the price premium one pays for the Leaf relative to a Toyota Corolla.

©2011 Reflections of a Rational Republican

Again, this is not the end of the story.

Tomorrow, I will run the numbers for a range of gasoline and electricity prices.

Click here for the next installment of this series.

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About Sean Patrick Hazlett

Conservative clean energy crusader, national security hawk, financial analyst, engineer, and former military officer.
This entry was posted in Business, California, Clean Energy, Clean Tech, Climate Change, Energy Security, Finance and Economics, Investing, Predictions, Taxes and tagged , , , , , , , , , , , , , . Bookmark the permalink.

3 Responses to Should I Buy a Hybrid or an Electric Vehicle? (Part V): Mileage and Fuel Sensitivity Analysis

  1. A. G. Rennie says:

    There is another reason to get a Prius, though – it gives off a bit less pollution & greenhouse gases. But that cost of emissions is not out of the owner’s pocket – everybody pays. I have a Prius, now seven years old. I drive about 12.5K miles a year, but I plan to own it until I drive it into the ground, certainly more than 10 years. With C.D. rates at 2%, I’d rather have the gas savings from driving my Prius (also fewer fill-ups needed. 🙂 )

  2. Pingback: Should I Buy a Hybrid or an Electric Vehicle? (Part VII): Carbon Analysis | Reflections of a Rational Republican

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