Auto dealers jump-start production of costlier hybrids

Automakers are noticing the increased consumer demand, responding with 21 cars, pickups and SUVs either available now or slated for release by 2008.

However, drivers likely will save the environment more quickly than they’ll save money with a hybrid.

Hybrids cost more than conventional cars. A regular 2005 Honda Accord, which gets an Environmental Protection Agency-determined 21 miles per gallon for urban driving and 30 miles per gallon for highway driving, has a manufacturer’s suggested retail price of $27,365. Its hybrid counterpart, with a 29/37 split on fuel economy, has an MSRP of $30,655.

The $3,290 more a consumer would have to pay for a hybrid Accord means years of driving to recover the difference at the gas pump.

For example, if a driver logs 15,000 miles in a year and jumps from 20 miles per gallon on average to 30 miles per gallon with a hybrid, they would use 250 fewer gallons of gas. If gas prices remained a steady $2.10 during the year, the consumer driving the hybrid would save $525.

Consumers can offset the higher ticket price with a federal tax deduction.

Individuals who buy new 2005 hybrids can deduct $2,000 this year from their taxes as a clean-fuel vehicle deduction. However, the deduction amount will fall to $500 in 2006.

Ultimately, the environment might be the big winner in the hybrid boom.

John Millett, EPA spokesperson, said concern for the environment is incentive enough to buy a hybrid, regardless of the economic impact.

“We’re very pleased with the trend toward hybrids,” Millett said. “The consumers have cleaner and more fuel-efficient choices.”

For the full story from the Aug. 15 issue of SBJ, click here.

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