Reduced fuel use recovers cost premium
GM of Canada believes it will change the economic rules for hybrid vehicles with the launch of its Saturn Vue Green Line sport-cute this year.
With a premium of only $2,600 added to the price of a Saturn Vue for a hybrid-electric system, GM of Canada has undercut the other hybrid offerings on the market, and that makes genuine savings from reduced fuel use a distinct likelihood, and quickly.
Because of the size of the premuims charged for hybrid versions of such vehicles as the Ford Escape, Honda Civic and Accord, Lexus RX, and Toyota Camry, Prius (when compared to a Toyota Corolla) and Highlander, it has been difficult to impossible for consumers to save any money from reduced fuel use.
An extremely optimistic study by the British Columbia Automobile Association, for example, showed that it was possible for consumers to save money on the market's existing hybrids, but only after five years and only if all the potential cost breaks went their way and only if they lived in the Vancouver area and were able to get what seems to be the country's only interest rate reduction for alternative fuel vehicles.
GM's case for the Vue Green Line is much simpler and pretty much works across the country, though it does assume that the consumer qualifies for a $2,000 grant from the Ontario government or some other munificent agency. Most importantly for comparison's sake, it matches the grant level built into the recent BC study.
GM's economic hypothesis is also built on the same variable factor as the other hybrids -- that the consumer achieves the lower mileage figures as measured by Natural Resources Canada (NRCAN).
While these mileage improvements are rarely matched by any vehicle in real life, where they might be worse or better, they do provide a consistent framework for comparison and they are used when making the cost case for the other hybrids.
Following the common equations then, GM is saying it will take about 22.22 months for consumers to recover the premium being charged for a Saturn Vue Green Line, and that is less than half of what it takes for the other models. It also uses an average gas price of 90 cents a litre. Substitute gas at $1 a litre and the payback time for the Vue Green Line would be about 20 months.
The Vue Green Line has an MSRP of $28,795, which is $2,600 more than a comparable Vue with a smaller and less powerful inline-four. Deduct the $2,000 tax rebate, and that's a premium of $600 that has to be recovered.
On those federal fuel economy studies, Saturn Vue Green Line delivers up to 20 percent better fuel economy than the non-hybrid model, including a 6.7L/100 rating that GM notes with some satisfaction is "the best highway rating of any SUV currently available."
Based on NRCAN's figures, GM says, the 2007 Saturn Vue Green Line will use 360 litres less fuel than the non-hybrid Vue every year. With gas at 90 cents, that's $324 saved a year, or $27 a month, which means 22.22 months to pay back the extra cost. With gas at $1 a gallon, the annual savings are $360, which is $30 a month, or 20 months to pay back the extra cost.
To be sure, there are a lot of variables when it comes to working out the payback time for a hybrid vehicle, including the real world fuel ecomony levels attained by the consumer. But when you measure hybrid models using the same set of suppositions, the Saturn Vue Green Line should pay for itself through reduced fuel use faster than any other model on the Canadian market.
photo:GM of Canada
GM of Canada believes it will change the economic rules for hybrid vehicles with the launch of its Saturn Vue Green Line sport-cute this year.
 |
| (Photo: General Motors) |
Because of the size of the premuims charged for hybrid versions of such vehicles as the Ford Escape, Honda Civic and Accord, Lexus RX, and Toyota Camry, Prius (when compared to a Toyota Corolla) and Highlander, it has been difficult to impossible for consumers to save any money from reduced fuel use.
An extremely optimistic study by the British Columbia Automobile Association, for example, showed that it was possible for consumers to save money on the market's existing hybrids, but only after five years and only if all the potential cost breaks went their way and only if they lived in the Vancouver area and were able to get what seems to be the country's only interest rate reduction for alternative fuel vehicles.
 |
| (Photo: General Motors) |
GM's economic hypothesis is also built on the same variable factor as the other hybrids -- that the consumer achieves the lower mileage figures as measured by Natural Resources Canada (NRCAN).
While these mileage improvements are rarely matched by any vehicle in real life, where they might be worse or better, they do provide a consistent framework for comparison and they are used when making the cost case for the other hybrids.
Following the common equations then, GM is saying it will take about 22.22 months for consumers to recover the premium being charged for a Saturn Vue Green Line, and that is less than half of what it takes for the other models. It also uses an average gas price of 90 cents a litre. Substitute gas at $1 a litre and the payback time for the Vue Green Line would be about 20 months.
 |
| (Photo: General Motors) |
On those federal fuel economy studies, Saturn Vue Green Line delivers up to 20 percent better fuel economy than the non-hybrid model, including a 6.7L/100 rating that GM notes with some satisfaction is "the best highway rating of any SUV currently available."
Based on NRCAN's figures, GM says, the 2007 Saturn Vue Green Line will use 360 litres less fuel than the non-hybrid Vue every year. With gas at 90 cents, that's $324 saved a year, or $27 a month, which means 22.22 months to pay back the extra cost. With gas at $1 a gallon, the annual savings are $360, which is $30 a month, or 20 months to pay back the extra cost.
To be sure, there are a lot of variables when it comes to working out the payback time for a hybrid vehicle, including the real world fuel ecomony levels attained by the consumer. But when you measure hybrid models using the same set of suppositions, the Saturn Vue Green Line should pay for itself through reduced fuel use faster than any other model on the Canadian market.
photo:GM of Canada
Article Gallery