How expensive is gas?

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 6:34 pm

More pictures of the Ford Escape, to be released this summer.

Engine...

Battery, tucked down under in the back...

Good luck getting one in the next year...

- Bill

RACastanet · Post by **RACastanet** » Fri May 21, 2004 9:17 pm

Bill stated: "I remember once, Rich, when you said the reason why people weren't making these things was because there was no demand. Try going down to a Toyota dealer today, and buying a Prius. Check out the waiting list."

Yep, I said that. And I still say that. They are hard to get because production of hybrids is low in numbers, I'll guess under 100,000 a year. Why? Manufacturers are not sure the demand is there.

You are a huge proponent of hybrids Bill, and speak of them often. Why don't you have one? Many talk about the benefits but would really rather not make the commitment. The manufacturers know this.

The cost of a hybrid is about $3,000 more than a similar sized car. If my Sable gets 25 mpg and the hybrid (smaller and less peppy) gets 50 mpg (which they do not come close to in real life) and we both drive 10,000 miles a year (I'm keeping it simple) what is the payback?

I'll use 400 gallons a year at $2/gal for $800 in fuel cost. You will use 200 gallons so will spend $400. At a $3,000 premium your simple payback is 7.5 years! At some point you will have to buy a new battery for several thousand plus your overall maintenance will be higher to boot what with two sets of technology under the hood.

So, buy a hybrid if you want to be 'green', but not to save money. In the long run, buy a nice gasoline or diesel (this is a really good choice) sedan and put the $3,000 hybrid premium in a 7 year CD. You will come out ahead.

To be continued...

Rich

RACastanet · Post by **RACastanet** » Fri May 21, 2004 9:33 pm

Cont...

There will be and already are unintended consequences resulting from hybrids.

I stated in an earlier thread that the hybrid technology will pose seriious problems to rescue personel. It has come to pass that emergency response personel have been injured by the electrical system. The energy in a 200 volt battery bank does not go away by turning the key off. There was even a report on channel 12 by a local fire dept recue squad on the evening news a week or so ago that they were very concerned about attempting a rescue involving a hybrid based on reports they are getting. Hmm...

Also, picture this... a rollover or rear end collision that ruptures the battery cases. How many gallons of sulphuric acid are in there? Now what?

Also, I read a report recently that insurance companies are planning to charge significantly higher rates for small hybrid vehicles that will be hard to repair due to the expense of the technology.

Also, in Virginia, that $3,000 premium over $20,000 will be taxed at the full local personal property tax.

Hmmm.... the costs are adding up.

Now, look longer term. As these vehicles age, where will all of the old batteries go? Each car will have 1,000 pounds of lead, acid, cadmium and all sorts of toxic stuff in them. Most cars will go thru at least two sets of batteries. My guess is there will be huge battery dumps that will rival used tire dumps only they will be much more toxic. I guess we could send them to Mexico where the locals have no EPA and will just dump them into a river. With the huge environmental problems associated with battery disposal the cost of replacement will soar!

continued...

Rich

RACastanet · Post by **RACastanet** » Fri May 21, 2004 9:43 pm

I agree that the hybrid is a bridge technology as we await the fuel cell car. However, I do not believe we need it. It is merely a PC response by the manufacturers to get the public and government off of their backs.

This country has huge reserves of coal and oil shale (not to mention the oil in Alaska the liberals won't lets us produce). If gasoline approaches $4 a gallon the economics will make coal gasification and oil shale production profitable to the petro companies. Then we will have all we want. I read a report somewhere (cannot find it now) that we have centuries of energy in the US oil shale and coal beds. And it is all right here.

As for supporting the terrorists, lets look at the real long term threat to the US. It is not the middle east, it is China. If China could find a way to get over here they would sacrifice hundreds of millions of their people to overrun us. Do you ever buy anything made in China? It is hard not to.

If you are worried about our future, worry about China and their 1 Billion people. They are very patient and will plan a century ahead in their quest to become the #1 world power.

The mideast will eventually burn itself out. China is the real threat.

Rich

Bill Glasheen · Post by **Bill Glasheen** » Fri May 21, 2004 9:45 pm

You are a huge proponent of hybrids Bill, and speak of them often. Why don't you have one?

Because they only make toy-sized hybrids. I need one that is van sized, as does every other middle-aged person with a family. Until they make these, it's all just an experiment.

It isn't hybrids per se, it's any vehicles that wean us off fossil fuels.

I don't have a problem with China - or anyone else - beating us fair and square in the world market. We are not God's chosen ones. We need to earn our place on the top of the hill, like anyone else. So far so good, but the opportunity is there for any economic power to dominate if they build better mousetraps and educate smarter people.

Haven't seen any Chinese flying planes into buildings or blowing themselves up in cars lately...

- Bill

Guest · Post by **Guest** » Fri May 21, 2004 10:07 pm

And you can run those diesel trucks on french fry...er...freedom fry grease! I believe the Brits call them chips, no?

See Ben’s quote.

Due to the popularity of fuel efficient vehicles, some law makers are devising a method of taxing mileage instead of fuel. We can't win for losing!

Your right Ben we can’t win for losing some time. If we run the transportation system on French Fries we are going to have to eat at the Golden Arches more often to fuel the demand for bi diesel. In a society that already suffers from obesity this would not be a good thing.

But put some good old fashioned Apollo 13 I-want-it-now research into this stuff, and you'll have alternatives coming out the yazoo. And there will be big bucks to be made by the country that figures it out. Energy is gold, and the world will beat a path to your door.

On the other hand Canada has larger oil reserves than Saudi , so we may not be so keen on seeing alternative resources explored. We would rather just sell some oil to the U.S.

Dana thanks for the kind words, first class is Monday!

f.Channell · Post by **f.Channell** » Sat May 22, 2004 3:31 am

Another ford SUV?
Put some firestones on it and just watch it roll over and dump battery acid all over the highway.
Friends don't let friends drive Fords.

I'll stick to my Corolla. Middle aged with 2 kids and we fit fine!!
The 6 foot staffs are tricky to get in but we manage.
Just filled it for $20.00 And I'm good for a long long way.
F.

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 4:07 am

Continued...

From Rich...

I stated in an earlier thread that the hybrid technology will pose seriious problems to rescue personel. It has come to pass that emergency response personel have been injured by the electrical system. The energy in a 200 volt battery bank does not go away by turning the key off. There was even a report on channel 12 by a local fire dept recue squad on the evening news a week or so ago that they were very concerned about attempting a rescue involving a hybrid based on reports they are getting. Hmm...

Also, picture this... a rollover or rear end collision that ruptures the battery cases. How many gallons of sulphuric acid are in there? Now what?

Yes, I remember this argument. Course we could always fill the vehicle up with a full 20 gallons of gasoline and then run into the back of it. That would be a safe alternative, no?

This argument doesn't pan out, Rich. Baloney. There are more than a few Prius's on the road now, and I don't see the drama on the 6:00 news...

Check out the NHTSA website. Lots of material about gasoline explosions in wrecks. None about battery shocks or battery acid. Why? see the next post.

Also, I read a report recently that insurance companies are planning to charge significantly higher rates for small hybrid vehicles that will be hard to repair due to the expense of the technology.

Show me the report. Know anyone that owns a Prius? Those that I know aren't complaining about their insurance.

Also, in Virginia, that $3,000 premium over $20,000 will be taxed at the full local personal property tax.

Hmmm.... the costs are adding up.

Might want to check this out, Rich...

$20,810 MSRP [1]

Start driving the new, mid-size 2004 Prius with Hybrid Synergy Drive®. Completely reconceived, the gas/electric Prius offers all the power of a conventional vehicle, an unheard-of 55 estimated combined mpg, [2] available BluetoothTM [3] technology and an Advanced Technology Partial Zero Emission Vehicle (AT-PZEV) rating. [4] Prius buyers may also be eligible for a federal tax deduction.

Costs adding up, eh? Whatever those vehicles are in your imagination, you ought not to buy them!

BTW, Virginia property taxes are deductible on the Federal. I do it every year.

Fred

Another ford SUV?

I know, I know... Rich gets upset when I say nice things about foreign cars. I just wanted to eliminate that, and see what he said.

Toyotas are a good choice.

- Bill

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 4:19 am

More from Rich's lecture...

Also, picture this... a rollover or rear end collision that ruptures the battery cases. How many gallons of sulphuric acid are in there? Now what?

***

Now, look longer term. As these vehicles age, where will all of the old batteries go? Each car will have 1,000 pounds of lead, acid, cadmium and all sorts of toxic stuff in them. Most cars will go thru at least two sets of batteries. My guess is there will be huge battery dumps that will rival used tire dumps only they will be much more toxic. I guess we could send them to Mexico where the locals have no EPA and will just dump them into a river. With the huge environmental problems associated with battery disposal the cost of replacement will soar!

The Toyota Prius uses a Nickel-Metal Hydride battery. Same with the Ford Escape. These are the "dangerous" batteries you've been using for years around the house.

Daimler-Chrysler has been experimenting with a Lithium battery.

BTW, ever heard of recycling?

Also, there's a 100,000 mile warranty on the battery in both the Toyota and the Ford. You know, the same 100,000 mile warranty that's on all those GM vehicles you own...

- Bill

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 4:50 am

About Rich's math... Your savings calculations don't take a few things into account.

* I drive about 20,000 per year.

* Gasoline is now around $2/gallon, and climbing.

* You get a big federal tax deduction on a hybrid.

* State property taxes are deductible on the federal.

Way I see it, it'll take me 2 years - if that - to make up any difference.

Hmm...

Also consider the savings of...

* Not having to spend billions sending troops over to oil bearing countries because we're on our way to complete energy self sufficiency.

* Cutting down on the bank accounts of terrorist organizations. That means lower security costs.

Hmm...

Also consider newer, more restrictive pollution control laws coming down the pike. The hybrids already surpass the most stringent requirements. Gonna have to pay some serious bucks to get conventional gasoline engines to comply.

Hmm...

Also consider that in the case of the Lexus RX400 vs. the RX330, you get 20% more power with better gas mileage. Wonder how much people typically pay to get 20% more power in an engine, even with worse gas mileage?

Hmm...

And once you start producing these vehicles in large volumes, the unit price plunges.

Hmm...

- Bill

RACastanet · Post by **RACastanet** » Sat May 22, 2004 1:24 pm

Btll said: "The Toyota Prius uses a Nickel-Metal Hydride battery. Same with the Ford Escape. These are the "dangerous" batteries you've been using for years around the house."

Read the note on those batteries... they are toxic and 'explosive'. Says so on the side of a Roy O Vac I just looked at.

Bill said "Yes, I remember this argument. Course we could always fill the vehicle up with a full 20 gallons of gasoline and then run into the back of it. That would be a safe alternative, no?"

As I recall, these are hybrids we are talking about and also have a gasoline engine. So, we have explsive batteries and combustible gasoline. Nice mix.

Bill said; " $20,810 MSRP [1] "

Is this the price for the Lexus you mentioned, or the 'experiment' car that is roo small for a typical family of four that you will not buy.

Bill said: "Also consider newer, more restrictive pollution control laws coming down the pike. The hybrids already surpass the most stringent requirements. Gonna have to pay some serious bucks to get conventional gasoline engines to comply."

GM engines are there and have exceeded the reqiurements since about 2000.

Bill said: "You know, the same 100,000 mile warranty that's on all those GM vehicles you own..."

Nope, do not have that warranty but do not need it. The 100,000 mile warranty is a sales tool. If you know anything about manufacturing and cost calculations you would know the 100,000 is priced into the MSRP. It is not free. i'd rather have a vehicle that I know will run than one in the shop under warranty.

More later...

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 1:27 pm

Another thing to consider...

Ford Motor Corporation has to pay royalties on many of the patents it had to use to make the Escape hybrid. Why? Toyota did the research first, and ran to the patent office.

What would the revenue stream be like if American auto companies got off their butts and took this whole problem seriously? What would it be like if American auto companies did some serious R&D towards the next generation of autos, rather than copying what the Japanese and Germans are doing, and turning part of the profits over to them when they finally get around to building these cars?

- Bill

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 1:37 pm

Rich

The Lexus is a luxury SUV. The hybrid is just slightly more expensive than the original nonhybrid, but the difference is tax deductible on federal. And the state taxes are deductible on federal. So... It's just about a wash. In any case, compare apples to apples here.

In my case, I'm waiting for a vehicle in the class that I use every day. They haven't made one - yet.

And as for the 100,000 mile warranty being factored into the price of the vehicle, well I have two things to say to that. First, you are wrong. Just look at the price. Second, there's been a series of articles out now that explain what happened to Hyundai when they introduced their 100,000 mile warranty. You know, those really, really expensive cars, right? Anyhow, bottom line is that their quality - as measured by J.D. Power and Associates, has skyrocketed to the top of the pack. This is a classic six sigma business case, worthy of Harvard Business School study. Check it out yourself.

As for the "Toxic" and "explosive" nature of nickle-metal hydride batteries, well...better tell that to the millions of digital camera owners out there. Never know, you could have spontaneous combustion whenever grandma blows out her birthday candles.

These batteries are toxic if you eat them. However they can be recycled. A battery that size is recycled by the dealer.

These batteries are explosive if you throw them in a fire, just like a lot of things. The lawyers make them put that on the label so that some idiot who throws a box of digital camera batteries in his livingroom fireplace won't sue the manufacturer (for much) when the things start popping and send embers of the fire onto the livingroom carpet, causing a house burndown. But what the heck, this is a win-win for the legal profession. The lawyers make money when they caution us about idiots who do stupid things. Then more lawyers make money when the idiots do those stupid things, and the lawyers sue the deep pockets. Sigh...

Bottom line - they only need to be disposed of properly, so they can be recycled. No problem with a car being turned upside down. No problem with a car being rear-ended, especially in comparison to adding that much more gas into the gas tank for lower mileage vehicles.

And I'm willing to bet that the battery adds more protection to passenters in a rear end collision than it adds danger to the accident scene. If nickel were that much of a problem, then I would think we would have something other than that used in our 5 cents coin.

- Bill

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 2:07 pm

This is what happens to the 100,000 mile warranty club. And remember, Hyundai builds the least expensive cars in the industry.

J.D. Power Quality Study: Hyundai Jumps, Nissan, Porsche Slump

J.D. Power: Hyundai Tops Toyota

Edmunds.com Comments on Hyundai's Quality Success in Response to J. D. Power and Associates' Survey Results

You are a six sigma green belt, Rich. You should be able to figure this out.

- Bill

RACastanet · Post by **RACastanet** » Sat May 22, 2004 2:16 pm

Bill said: "And as for the 100,000 mile warranty being factored into the price of the vehicle, well I have two things to say to that. First, you are wrong. Just look at the price."

Yes it is. It is somewhere. It may be in the price of the overall fleet but it is there. Nothing is free. Companies are in the business of making money. You are naive to belive it is free.

Yes, Hyundai is doing a good job on quality now. They forced themselves into it with the warranty. Chrysler did the same thing over 20 years ago when it introduced its 7 years/70,000 mile warranty.

Bill said: "copying what the Japanese and Germans are doing"

The Germans? The JD Power survey you quoted shows VW next to last of all nameplates in quality, and falling! Good quality. When are you buying the VW Toureg?

I do not get upset to hear about foreign autos, just European autos. They are highly overated. The Japanese are leading the pack but GM has brands right up there with Lexus, that country's premium brand.

By the way, what is the MSRP of the Lexus? Not in the $20,000 range. How about $40,000 or more.

I could not find the article about insurance... should have book marked it. However, my killer Tahoe insurance bill for 2004 is $441 with max coverage. No killer premium there. It is about the same as the same year Sable I own. What do you pay?

More later...

Rich