Vincentric: Canadian Hybrid Analysis
Earlier this year, Vincentric released its Canadian Hybrid Analysis. After crunching the numbers, they found that only 7 of 29 hybrid vehicles analyzed had a lower total cost-of-ownership than their closest all-gasoline counterparts.
“I’m concerned about how the deprecation of fuel prices affects this market,” said David Wurster, President of Vincentric. “This is the first time we’ve done the analysis in Canada. In the States we’ve done it a few times and we’ve had fewer vehicles actually paying for themselves, in terms of cost of ownership, because fuel costs declined so much.”
To conduct the Canadian Hybrid Analysis, Vincentric measured total cost-of-ownership using eight different cost factors: depreciation, fees & taxes, financing, fuel, insurance, maintenance, opportunity cost, and repairs. The analysis assumed vehicle ownership of five years and 25,000 annual kms of driving.
Hybrids are usually sold at a premium, when compared with their non-hybrid counterparts, and this premium impacts other cost factors, namely financing costs, fees and taxes, and depreciation.
“In some cases fuel cost savings can help offset these costs,” Wurster adds, “but with fuel prices decreasing approximately 33% in the past six months, increased fuel efficiency alone is not always enough to keep hybrids competitive with their all-gas counterparts.”
Hybrids still viable
Wurster is quick to point out that his organization is not condemning hybrids, nor is he trying to dissuade fleets from investing in them. “Despite decreasing oil prices, we saw vehicles that more than paid for themselves,” he said. “If you’re concerned about carbon emissions, as well as your wallet, there are still values in the hybrid marketplace that can pay for themselves, relative to a comparable non-hybrid competitor.”
The bottom line, Wurster said, is that fleet buyers need to look at their specific requirements to see if hybrids make sense for them. “If the objective is to lower fuel costs and lower cost of ownership, you can still find values in the hybrid market. But you do have to look at specific lifecycle and driving patterns, and the specific vehicles you want to compare against. And if you want to hedge your bet for increasing fuel prices, hybrids are still a smart way to go.”