by Cedric Hughes, Barrister & Solicitor with weekly contributions from Leslie McGuffin, LL.B.

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Hybrids Going Mainstream

The United States government recently announced stricter fuel efficiency standards for US passenger vehicles and light trucks.  Average fleet mileage standards must reach 35.5 miles per gallon (6.62 litres/100km) by 2016 rather than by 2020 as targeted by the previous administration’s Energy Security and Independence Act of 2007, and they apply nationally. Congressional approval is not required but implementation rules could take more than a year.  Now the purpose is to put into high gear the US drive towards energy independence.

 Critics take issue with the cost, —an additional $1300 per vehicle is the most commonly cited average—the safety repercussions of lighter and smaller vehicles, and the numerous economic pitfalls of what, along with the bail-out monies amounts to an auto-focused industrial policy. Peter Foster in the National Post commented on the “lunacy of lumbering the US auto sector with higher costs” when both Chrysler and GM are reportedly bankrupt.
 
Steve Milloy, the publisher of junkscience.com says the new standards “may kill more Americans at a faster rate than the Iraq War,” citing statistics from the National Academy of Sciences linking better mileage standards from lighter cars with “about 2,000 deaths per year,” and estimates from the National Highway Traffic Safety Administration that every 100-pound reduction in small car weight increases annual traffic fatalities by up to 715.
 
A recent New York Times article entitled “A dangerous road” discusses the risks of industrial policy faltering when it approaches a technological frontier like the one Detroit is now facing: to shrink and trim while at the same time moving toward a future “expected to rely on alternative technologies, like battery-powered electric cars.”  Government intervention may encourage overinvestment in areas that “prove to be technological dead ends” and may result in “politics…easily overriding economic rationality.”
 
Meanwhile, the 2009 Toyota Prius, a mid-size hybrid electric featuring a 1.5L, four-cylinder engine with a continuously variable transmission (CVT) is receiving accolades as it develops from its unique origins as the first mass-produced hybrid vehicle to being a “mainstream” car that is the most fuel efficient and amongst the cleanest vehicles sold in the United States based on non-CO2 emissions.  Fuel consumption for the latest (third generation) Prius is 4.0L/100 km in the city and 4.2L/100km on the highway (roughly 50 miles per gallon) with pricing starting at $27,710.  Toyota is aiming for the Prius to join Camry (and the Honda Accord) in the best-seller category.  In 2008 Camry and Prius sales for North America were, respectively, 437,000 and 159,000.
 
Safety ratings for the 2009 Prius are not as impressive as the sales statistics.  Informedforlife.org gives it a SCORE [Statistical Combination Of Risk Elements] of 79.1, which classifies it as a medium risk vehicle.  Recommended vehicles score less than 65 and have no individual front or side ratings of "Poor" or "Marginal" by the Insurance Institute for Highway Safety (IIHS).  The IIHS rear impact rating for the Prius is marginal.  This also hints at another issue: the potential high cost of repairs for even a minimally forceful rear end crash.
 
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I think of my $1300 extra fee for my Hybrid, as a message to my friends, my family, my government, and the automobile manufacturers, that I am willing to make a commitment to save the planet. The side benefit, is that I save some money on fuel.

But if you really care about the cost of your investment check out this study:
http://www.bcaa.com/images/content/2009_Hybrid_Analysis_Backgrounder.pdf

 
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