When will the Prius or the Volt outsell the Corolla?
Well over 100 mpg is easy in the Volt
What’s a fair cost for good fuel economy?
What is 100 mpg worth? How much would you spend to double your fuel economy? What is good fuel economy worth? Is it only worth the cost of the energy it saves? More, less?
What kind of pricing, for instance, would it take for the either the Chevy Volt or the Toyota Prius to outsell the Toyota Corolla?
A Toyota Prius, for instance, can average about 50 mpg, and it costs $22,800. After 10 years the average Prius driver should spend about $8000 on gas. That’s about $31,000 in car and fuel costs.
On the other hand a Toyota Corolla averages about 30 mpg and costs only $15,450, more than $7000 less than the Prius. After 10 years the average Corolla driver spends $14,000 in gas. That’s about $29,500 in total vehicle and gasoline costs after 10 years – still less than the Prius.
Obviously, however, this isn’t apples to apples as the base Prius offers more ammenities than a base Corolla. Thus, the costs of the vehicle and gas are probably pretty equal, although financing charges would seem to favor the Corolla. Consequently, in September 11,394 Prius hybrids were sold, while more than 21,000 Corollas were sold.
Of course are Prius drivers really potential Corolla buyers? Is just a high fuel economy number drawing Camry buyers, for instance, into the Prius? As a result, are big fuel economy numbers valued in and off themselves, regardless of the total costs of the vehicle and fueling?
What about 100 mpg?
A vehicle like the Chevy Volt will average over 100 mpg for most drivers using a mixture of both gasoline and electricity, but mostly electricity, at a cost of $41,000 (although it qualifies for numerous tax credits). Is 100 mpg+ in a Volt worth $41,000?
A similarly sized Chevy Cruze starts at $16,275, and will achieve about the same kind of fuel economy as the Corolla in mixed driving – although again, this is not apples to apples. Nonetheless, the Volt costs $24, 725 more than the Cruze versus the extra $7000 the Prius costs compared to the Corolla.
However, let’s say that tax incentives help increase scale and eventually the Volt costs just $30,000. That’s $13,725 extra up front, or about twice as much extra as the difference between the Prius and the Corolla. However, financing that extra difference at 6 percent costs an extra $800 per year, or almost half the yearly costs to fuel the Cruze. Then there are still the costs of electricity and the small amount of gasoline that most will use.
But again the Volt’s sizzling hot 100 or 130 mpg per year number is going to sound a lot better than 50 mpg per year, if such numbers have value in and of themselves, which the Prius seems to suggest, at least for a certain percent of consumers, so the Volt will find buyers.
Consequently, if GM could bring the price of the Volt down to $30,000 without any tax credits, it seems fairly reasonable to assume the higher fuel economy number will be enough to entice as many consumers as are currently buying the Prius, even though the extra upfront costs and interest charges would still make the Prius a better deal.
Still, the Prius isn’t even a top 10 best seller in the US.
Therefore, what is the the pricing point that puts Prius or Volt sales ahead of the Corolla, assuming relatively stable gas prices? Even more interesting, could either of these vehicles ever outsell the Ford F150?
