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Hybrid premium justifies the extra cost?

I see lot of different opinions whether hybrids are worth the extra cost. The problem here is that you cannot always compare 2 identical hybrid and non-hybrid models since often you’ll find different equipment levels. However the Lexus RX has pretty much exactly same configuration except for difference in the AWD (part-time vs full-time). So taking that example let’s compare the payback time in years for the $5250 price premium:

So if you drive 15K miles and gas price is at $3 for premium it would take 7.5 years before you break even with the extra initial cost. If you drive 20K miles per year and premium gas is at $4 then it would take only 4 years.

Obviously there are a lot of other factors to change this calculation: your city/highway mix (in this case 55% city), do you really achieve the EPA rating (light or heavy foot). Also I ignored any federal incentives here which can decrease payback time by 1-2 years and for some hybrids the extra cost is smaller. Bottom line is that it mostly depends on individual driving situation and current gas prices. Most likely we’ll also see some price premium drop in the future for hybrids.

If we’d ignore extra cost and look at environmental impact then you would emit less CO2 especially since hybrids do emit less even at same mileage. However there is some extra cost for manufacturing and recycling a hybrid in terms of CO2 In but manufacturers rarely show a lifetime analysis. The only analysis I’ve seen is from Honda. See this example where Honda claims a big reduction in CO2 over the lifetime of the vehicle:

One footnote here is that total car traffic emits less than 10% of total CO2 so it’s not the biggest factor but it’s one that we have direct control over. Second a Prius owner driving 30K miles has a bigger environmental impact than a Honda Civic non-hybrid owner driving only 10K miles. So all these calculations are purely a relative comparison.


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