08-02-11: Basic Mileage Math

 It’s official: the Obama Administration has set a CAFE average of 54.5 MPG by 2025. On one hand, manufacturers are warning that such unrealistic and politically motivated hocus pocus will raise the price of new cars far more than the market can bear and will dramatically reduce safety while destroying thousands of jobs and further damaging our already fragile economy, even if it is possible to engineer vehicles that can, across an entire fleet, reach such fanciful numbers (it’s not). But it’s not all bad news! The good news is that a good portion of those thrown out of work will die in car accidents because their vehicles will be smaller and lighter and far less capable of absorbing impact energies. This will, of course, lessen unemployment.

I’m with Lilly Tomlin, who said: “No matter how cynical I get, I can’t keep up.”  No doubt the Obamites would see all of this as a feature, not a bug.

On the other hand, the Obama Administration and its allies claim that the wonders of green technology will save fuel, create or save jobs, cure the common cold, make you more attractive, raise the debt ceiling, make you taller and give you erections lasting longer than four hours which do not require medication or a call to a doctor (and you don’t have to sit naked in a cold metal bathtub outdoors either—I just can’t get that commercial.  Anyone?). To be fair, the claims of these people are only slightly less whimsical and fantastic. What is certain is that their numbers—if you take a moment to analyze them by means of the kinds of highly advanced methods taught only in the finest Ivy League schools—addition, subtraction, multiplication and division—are unicorn horns and fairy dust.

On April 26 (reprised 12-26-11), I posted an article on the Chevy volt titled An Explosive Automotive Debut. In that article I did a bit of math—always dangerous for an English major—and discovered that even if a Chevy Volt managed 200 MPG, it would take 14 years to break even by means of fuel savings on the difference in purchase price over a comparably equipped, high-mileage conventionally powered vehicle.

Of course, when we factor in battery replacement costs, it is simply not possible—using physics and mathematics as they are understood in the Milky Way Galaxy—to ever catch up.  By this I mean that Chevy has claimed that Volt batteries will last ten years—but maybe eight (Nissan, which apparently understands the word “honesty,” claims only that its batteries will last “several” years)—and will cost no more than $8000.00 to replace—but maybe $10,000.00.  Adding in battery replacement cost—and it will be necessary to replace it—tells the sad economic tale.

To be fair, Chevy has, at least once, claimed that it would replace batteries under warranty to the original purchaser, but if so—and that’s doubtful—it simply renders the Volt radioactive on the used car market.  Who is going to buy a used Volt—even used prices would have to be far higher than normal—knowing they’d have to spend ten thousand or so any day for a battery replacement?

It would seem to make sense that a green technology wonder car getting 41 MPG, compared to a comparable model getting only 23 MPG would save money on fuel, and so it would if those two numbers were the only parts of the equation. When we consider the fact that hybrid, hybrid/electric and electric cars cost considerably more than their conventionally propelled competitors up front, and that repair costs for such vehicles are much higher, all of the promised efficiency and fuel savings vanish. The Obamite sycophants haven’t mentioned that? No? Well then. As a public service, let’s return to Mrs. McGillicuddy’s third grade classroom and practice a little elementary mathematics.

Let us consider two versions of the same vehicle: the 2011 Ford Fusion, a popular mid-sized, four-door sedan. Keep in mind that it’s difficult to make such comparisons with a high degree of accuracy because prices vary a great deal from car to car due to differences in options, so for the purposes of this little exercise in elementary school math, we’ll compare only the MSRP of the Fusion 14SEL with the MSRP of the base line Fusion Hybrid. According to the Ford website, both vehicles appear to be outfitted comparably.

14 SEL Fusion: MSRP $25,300, 23 City/33 highway

Fusion Hybrid: MSRP $28,600, 41 City/36 highway

Initial Cost Difference: $3300.00

Notice that the real mileage advantage of the hybrid is in city driving not highway driving, which is an interesting quirk of hybrid technology. Keep in mind too that for most owners, the initial cost difference is likely to be much greater as there really is no such thing as a basic hybrid (manufacturers assume that people willing to shell out extra thousands for a hybrid are also going to want a much higher level of accessorizing). Depending on the make and model, it’s not unusual for hybrids to cost as much as $6000 more (I’m being conservative) than a comparable conventionally powered vehicle. This reality no doubt accounts for the fact that hybrid sales are, in 2011, less than 3% of the automotive market. Keep in mind too that tax and license fees are higher for more expensive vehicles.

If you are in the market for a mid size car and the Fusion looks good to you, the primary reason to buy a hybrid—if we assume that you’re not mostly looking for environmental street cred—is because it promises savings over the long run in fuel costs. However, those savings won’t be realized until you break even on the difference in MSRP. Let’s see how that works out, first analyzing only city fuel economy.

For no reason other than the ease of dealing with the numbers, let’s assume that you’ll drive 10,000 miles per year and that fuel will remain at $3.65 per gallon (If Mr. Obama has his way, it will “necessarily skyrocket”).

Raise or lower the miles or cost per gallon as you please, but the proportions will remain roughly the same.

14SEL: 10,000 divided by 23 = 435 gallons X $3.65 = $1587.75 per year

Hybrid: 10,000 divided by 41 = 244 gallons X $3.65 = $890.60 per year

Difference: $1587.75 – $890.60 = $697.15 in fuel savings per year

Break Even In: $3300 divided by $697.15 = 4.7 years

Simple math reveals that the proud hybrid owner would not began to save a penny in actual fact until after 4.7 years. You might be tempted to think that’s not bad until you realize that, according to RL Polk and Associates, in 2008 (the most recent year I could find for hard figures rather than estimates) the average new car buyer kept their new car for only (you saw this coming, didn’t you?): 4.7 years. Therefore, the average hybrid owner, if he kept his hybrid at least 4.7 years, could expect to save exactly zero in fuel costs. Keep it less than 4.7 years and he would lose money on that factor alone.

Current trends suggest that consumers might be holding onto their cars longer than ever, which seems reasonable considering our current economic woes, but we’re talking a matter of months, not years, so the figures don’t fundamentally change.

Now let’s examine the difference using the highway mileage figures. This is where things get really interesting.

14SEL: 10,000 divided by 33 = 303 gallons X $3.65 = $1105.95 per year

Hybrid: 10,000 divided by 36 = 278 gallons X $3.65 = $1014.70 per year

Difference: $1105.95 – $1014.70 = $91.25 in fuel savings per year

Break Even In: $3300 divided by $91.25 = 36 years

Let’s make it simple: The proud new hybrid owner would have to keep his hybrid 7.7 times longer than the average new car buyer just to break even, racking up 360,000 miles in the process.

Obviously, the more time the new hybrid driver spends in city driving, the better his numbers and the sooner he’ll break even and actually begin saving money on fuel, but the best time frame remains a stubborn 4.7 years. If we make the reasonable assumption that the actual numbers would be somewhere between these extremes, things don’t get any better. The midpoint is about 15.7 years, and even if we assume numbers so in favor of the hybrid that they make no sense, say eight years, the hybrid owner would still have to keep the hybrid nearly twice as long as the average new car owner just to break even.

The numbers don’t get better for other makes and models. In fact, when we start to consider crossover and SUV hybrids, the MSRP divide becomes greater and greater and the mileage savings smaller, again, placing the reality of savings in the same category as “shovel-ready jobs” or “the recovery summer:” non-existent.

There is no doubt that saving money on fuel is often not a new car buyer’s primary consideration, but since the Obama Administration is obviously trying to force drivers into a limited number of “green” choices, it’s only fair to examine the reality of their calculations. Elementary math makes plain that saving the American taxpayer money isn’t part of their equation.