Cost-Benefit Analysis of Hybrid vs. Diesel Cars

In a previous post, I discussed the hybrid’s real impact on the environment from a consumer point of view. It this one, I am going to compare hybrid and diesel cars from a fuel economy perspective, with all the associated costs and benefits.

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Cleaner and more fuel-efficient vehicles is what the majority of car buyers are looking for nowadays. The demand for better fuel economy and lower emissions is clearly driven by car buyers’ desire to cut fuel costs and preserve the environment, with many of them choosing hybrids over gasoline- and diesel-powered cars, in an effort to save some money and reduce air pollution. But, while hybrids definitely have better fuel economy, thanks to the technology they employ – with an electric motor that complements an internal combustion engine, and a regenerative braking system that recovers the energy that is lost while braking – they don’t always provide the savings that one might hope to get, as it depends on the car owner’s driving habits, how often they drive it, and how long they own the car.

What’s more, hybrids are not entirely eco-friendly, since they still use gasoline to power their engines, thus producing carbon emissions, on top of the pollution that is created in the manufacturing process for the batteries inside hybrids. Finally, there is the payback issue, which is very important, considering that hybrids, in general, are more expensive than their gasoline or diesel counterparts.

Starting with fuel costs, there are a couple of factors that have to be taken into account to determine whether you should buy a hybrid, or you would be better of with a diesel or a gasoline car. First of all, car buyers need to be aware that hybrids are much more efficient when driving in the city, which involves lots of stop-and-go driving, than on the highway, because of their regenerative braking systems. Also, a hybrid can run only on its electric motor when traveling at lower speeds, with the gasoline-engine kicking in when a certain speed limit is exceeded.

Diesel cars, on the other hand, get a great mileage on the highway, because diesel engines work more efficiently and burn less fuel at constant speeds. This is why a diesel might be a better choice for those who do a lot of highway driving, whereas hybrids are more suitable for people living in urban areas and do most of their driving on city streets.

As far as the environmental impact is concerned, just like diesels, hybrids do contribute to air pollution, albeit not as much. The amount of greenhouse gas emissions generated by hybrids depends on how the electricity that is used to power their electric motors is produced. In the U.S., most of the electricity is produced in coal-fired power plants, that emit significant amounts of greenhouse gases. However, there are states that have pretty clean power grids, where electricity is produced in power plants that run on nuclear, solar, wind, or even hydro power. States like California, New York, South Carolina, Washington, and Vermont, rely on renewable energy sources for electricity generation, so owning a hybrid in one of these states contributes to the reducing pollution more so than owning one in a state where electricity production relies on coal power.

Another fact that goes in favor of diesel cars is that diesel engines are now much cleaner than they used to be up until a couple of years ago, with sophisticated technologies, such as turbochargers and emissions control systems, that help reduce emission levels considerably.

When it comes to the costs involved in owning a hybrid car as compared to diesel-powered cars, the most important factor that should be considered is how often you drive and how many miles you cover over a given period of time. A hybrid can be a more cost-effective option only if you own it for a relatively long time, as it may take more than 7–8 years before you can make up for the higher purchase price, when you take the money saved on fuel into account. On average, a hybrid vehicle costs about 20% more than it’s similarly equipped diesel-powered counterpart, which is a significant difference in initial costs.

The bottom line is, buying a hybrid only makes sense if you plan on driving a lot (over 15,000 miles a year), if you intend on keeping it for at least 7 or 8 years, and if you mostly drive on city streets. This way, you will be spending a lot less money on fuel, and you will be helping the environment, otherwise, getting a diesel-powered car might be the more reasonable choice.

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