BCAA: Hybrids Not as Expensive as Most Think...at Least in Canada

8 June 2005

A cost analysis conducted by the British Columbia (Canada) Automobile Association (BCAA) reveals that, over a five year period, the cost differential between fuel-efficient hybrids and comparable gas-powered vehicles is minimal. And in one case, the hybrid is identified as being cheaper than its conventional cousin.

The analysis judged four hybrid models against their conventional gas-powered equivalents: the Honda Civic, Honda Accord, Ford Escape and Toyota Prius/Matrix. In addition to the initial purchase price, a number of variables were considered: fuel savings, the Canadian provincial Alternative Fuel Vehicle tax concession, and eligibility for low-interest rate financing.

With all these factors in play over five years, the Prius and the Civic would end up costing approximately CAN$3,200 more than their conventional cousins, the Escape CAN$2,400 more and one—the Accord—would cost CAN$3,000 less than the comparable V6 model.

In its 2005 member poll, BCAA posed questions regarding the attractiveness of hybrid vehicles at various costs. Knowing that most gas-electric hybrids currently cost about 35% more than a comparable conventional vehicle, 63% of members surveyed said they would be “very or somewhat likely” to consider purchasing a hybrid if the price was only 20% higher.

(Survey conducted March 2005. Methodology: random sample of 600 BCAA members. Margin of error: ± 4.0% at the 95% confidence level.)

If hybrids and conventional vehicles were priced the same, the percentage of likely purchasers jumped to 81 per cent.

To increase the demand for hybrid vehicles, more than half (55%) of respondents believed the provision of cost incentives such as a reduction in sales tax and annual motor license fees, was the most important action for governments.

Our polling demonstrates that most BCAA members have confidence in hybrid technology, but the price is holding them back. The provincial government’s alternative fuel vehicle sales tax break is a positive step toward closing the hybrid price gap. The federal government, with its commitment to reducing climate change, should follow the provincial government’s lead and adopt similar incentives to make low-emission vehicles more affordable for a broader range of drivers.

—Trace Acres, BCAA’s Director of Corporate Communications & Government Affairs

Resources:

• BCAA Hybrid Cost Analysis

(A hat-tip to Jack Rosebro!)