Cost-Effectiveness of a Hybrid Vehicle is Highly Conditional

The U.S. Department of Energy and U.S. Environmental Protection Agency's Fuel Economy website at www.fueleconomy.gov has a hybrid vehicle comparison calculator that allows users to compare a selection of hybrids with their non-hybrid counterparts. The calculator shows the manufacturer's suggested retail price (MSRP) and fuel economy difference between the two models and then calculates the fuel savings and payback period or number of years for the fuel savings to equal the extra cost of the hybrid model. Users may adjust the annual miles, percent mix of city versus highway (hwy) driving, and fuel price to see how the fuel savings and payback period changes.

The graph below shows an example of a hybrid model compared to its non-hybrid counterpart with the payback periods (expressed in years) under different assumptions. By adjusting the annual miles for the Camry Hybrid, the payback period changes from 1.6 years with 25,000 annual miles to 8 years with 5,000 annual miles. Fuel prices and driving mix also have a large effect on the payback period. Of course, if these assumptions are combined, the effect can be even more dramatic. To select different models and try your own driving/fuel assumptions, visit http://www.fueleconomy.gov/feg/hybridCompare.jsp.