Such a Deal!

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Toyota might want to consider packing up the plug-in version of its Prius hybrid and sending it off to the Land of Unwanted Toys.

Though the regular Prius is popular, the plug-in variant languishes. Despite being able to go much farther – and lot faster – on just the batteries, the plug-in has been idling on dealer’s lots, taking up floor space and costing everyone money.

Hence the decision – artfully packaged – to dramatically cut the 2014 Prius plug-in’s price by more than $2,000.

“It just got a little easier for drivers to maximize their fuel savings and be environmentally responsible,” reads the release from Toyota corporate announcing the base price of the 2014 plug-in Prius.

It’s now $29,990 – vs. $32,000 last year (2013).

Mind, this is the cherry on top of the $2,500 federal tax credit buyers of this vehicle (and any other plug-in hybrid or pure electric car) are eligible for. California buyers can lop off another $1,500 via the state’s Clean Vehicle Rebate Program.

That’s a $6,000 kickback!

Yet, despite of these financial inducements – and in spite of the car’s ability to deliver the equivalent of almost 100 MPG (the average of its mileage on just the batteries plus the mileage it gets when the onboard gas engine is running, divided by two) – people are not lining up.

How low will Toyota have to go?

Probably, to in the ballpark of $25k – the base price of the regular Prius. Which, rumor has it, Toyota sells at a net loss per car – amortized by the money made from the sale of Corollas and Camrys. It would be very interesting indeed to learn what the non-subsidized, non-cost-shifted price tag of each Prius – standard or plug-in – actually is.

My guesstimate is around $27k for the regular Prius – and probably about $35k for the more technologically elaborate plug-in, which has (among other upgrades) a sophisticated lithium-ion battery pack as well as more powerful electric motors, such that it is capable of achieving – and maintaining – close to 70 MPH with the onboard gas engine not running at all – and of maintaining that for several miles.

The problem isn’t that hybrids (and plug-in hybrids) don’t work. They actually work quite well. I’ve road-tested all of them – including the plug-in Prius (see here) and do not take issue with their functionality.

It’s the economics that give one pause – including, notably, the manufacturers of these cars.

Would any hybrids exist – other than as engineering demonstration projects – absent the political pressure (and subsidies)? It’s a fair question. And the answer is – probably not.

This isn’t about being “for” or “against” alternative forms of propulsion. It’s about whether there is an economically legitimate alternative to internal combustion. Here a quick detour through the history books is in order.

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