Wednesday, November 30, 2005

Hybrids

And, we're back from our extended Thanksgiving holiday. Today will be a short entry, since Holman Jenkins' extended sneer at hybrid cars and their purchasers is not entirely wrong to say that most new hybrid cars don't pay for themselves in gasoline savings over time. This being the Journal, though, Jenkins wasn't satisfied with mere unembellished facts, so there are a few matters to clear up.

First, Jenkins wildly overstates the amount of time that it would take for the average hybrid puchaser to make up the additional cost in gas savings. He tells car buyers that "Toyota applauds your willingness to spend $9,500 over the price of any comparable vehicle for the privilege of saving, at current gasoline prices, approximately $580 a year." Doing the math, he concludes that "should the price of gasoline rise to $5, after 10 years and/or 130,000 miles of driving, you might even come close to breaking even on your investment in hybrid technology."

This is a cherry-picked example that, by seizing on one of the most popular and therefore expensive hybrids available, makes the decision look obvious. In fact, according to a recent Detroit News study, if the price of gas averages $3 a gallon, some hybrids could save enough in gas to be worth the extra cost within four years (the average length of time a buyer will own a newly purchased car is 5 years).

Of course, that example is just as extreme a case as Jenkins'. The generally agreed fact of the matter is that, at current prices, most hybrid vehicles don't save enough money in gas to make up for the extra cost compared to a similar non-hybrid. Obviously, for someone who is currently driving an SUV, the math would be different. But there is more than enough real evidence for Jenkins to make his point. Why not make it in a credible way, rather than embellishing the evidence to make the case seem stronger than it is?

Second, Jenkins adds a throwaway line observing that "driving a fuel-efficient car does not yield any substantial benefits for society if it doesn't save the owner money." But this is simply wrong. The pollution and other negative externalities associated with gasoline usage are not borne by anyone involved in the transaction (hence, "externalities") and are therefore not reflected in the price. So, even if the price of gas at the pump isn't high enough to make a hybrid a money-saving proposition for an individual, the hybrid could be a net gain for society. We at Lucky Duckies don't know if in fact the costs of gasoline that are not reflected at the pump are enough to make hybrids a social good even if they cost their owners more money. Jenkins might well have a case to make that they do not. But we'll never know, because Jenkins simply denies the existence of the issue. Welcome once again to the Journal editorial page, where intellectually honest arguments are discarded even when a plausible case could be made for them, because a cheap shot and an unsupported assertion make for better copy.

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