News

Hybrid owners may be spending less for gas, two recent studies show, but they're almost certainly also paying thousands more to the car companies for the privilege.

Studies by the British Columbia Automobile Association (BCAA) and Edmunds.com in the United States make it clear that it's very hard for hybrid owners to recover the premiums that car companies charge for their vehicles under the present economic conditions.

Essentially, hybrids don't save enough fuel at current gas prices to recover their extra cost, unless they're driven two to three times farther every year than the current average of 20,000 km a year, but then that would increase the likelihood of service or maintenance work, which would add more costs.

Of course, hybrids would also make more financial sense at traditional annual driving distances if fuel prices went up to about $3 a litre.

It's impossible to state specific terms, however, since every hybrid carries a different premium and delivers different fuel economy levels, and sometimes there isn't a precise non-hybrid model to compare it with. Ford sells an Escape SUV with a traditional power train and one with a hybrid, for example, but there is no non-hybrid version of the Prius.

The BCAA study did come up with a comparison that showed the Honda Accord Hybrid would be a lot less expensive ($3,305) over five years, but only if the hybrid delivered the promised fuel economy levels (which experience increasingly shows they do not), if they get reduced-rate financing (available only in B.C. from VanCity), if they get a government grant and if they don't cost any more to service. Big ifs, to put it mildly.

Edmunds.com did a similar review of the cost differences between hybrid and vehicles with traditional power plants in the United States and reported that, "during the first five years of ownership, a hybrid can cost as much as $5,283 [U.S.] more than its non-hybrid counterpart."

Phil Reed, a co-author of Edmunds.com's Strategies for Smart Car Buyers, says potential hybrid buyers need to review the situation carefully.

"While some people buy hybrid cars because they appreciate the environmental benefits and enjoy using advanced technology," he says, "consumers looking at hybrids solely to save money at the gas pump need to carefully research the cost of actually owning and operating a hybrid."

According to Reed, "most hybrids' high sales prices, insurance costs and related expenses will offset the savings" associated with lower fuel and maintenance costs, though that last item is pure conjecture.

Reed says Edmunds.com analysts do "predict this cost differential is likely to decrease as the technology matures and hybrids become more mainstream." Currently, hybrids make up less than one per cent of the market so "the manufacturers have not yet been able to achieve economies of scale and are passing the higher costs along to their buyers."

Since current customer demand greatly exceeds supply, Reed says, "the vehicles are easily able to carry the premium transaction price. At some point in the near future, these dynamics are expected to change."

In reviewing both studies, it's easy to see that both agencies support the need to find ways to reduce airborne pollution, as they give hybrids every break possible and soft-pedal the results.

Notwithstanding that, it's also hard to miss the reality that hybrids cost more to operate.

Of the two studies, the Edmunds.com effort probably carries more weight because the Santa Monica-based firm uses its well-proven methodology of estimating real-world costs.

Volvo prices XC90 V-8

Volvo Canada will finally put the much-hyped 4.4-litre V-8 version of its XC90 station wagon on sale in July, with the 2006 five-seat model retailing for $64,995 and the seven-seater for $67,295.

For comparison's sake in the XC90 range, the base model (the 2.5T) with five seats carries an MSRP of $49,995, the 2.5T seven-seater is $55,620, and the soon-to-disappear T6 $62,620.

Volvo Canada says the XC90 V8 is aimed "at the heart of the market," which would include the Acura MDX, BMW 5-Series, Cadillac SRX, and Lexus RX330, though not all of them are available with V-8s.

Along with the two additional seats in the back, the seven-seat model also gets an integrated child booster seat in the second row.

The Luxury Package, which costs an additional $2,000 for the five-seater and $1,800 for the seven-seater, includes rear parking assistance, mass movement sensor, level sensor, cargo cover, retractable side-view mirrors, wood steering wheel, integrated booster seat (for the five-seat version) and a Dolby Pro Logic II premium audio system.

XC90 V8 customers can further customize the vehicle with a DVD-based navigation system ($2,500) and a new dual-screen rear entertainment system ($2,500). "With this pricing strategy,'' says Larry Futers, the new vice-president of sales for Volvo Cars of Canada, "we feel the 2006 XC90 V8 is ideally positioned to be a strong competitor in the high-end of the luxury SUV market." More importantly, says Futers, "this is a V8-powered luxury SUV that doesn't compromise our core values of safety, quality and environmental responsibility."

The V-8 will, of course, use more fuel and therefore create more pollution than any of the other versions of the XC90, but apparently that's a fair trade for the extra performance. Futers says the V8 "offers the grunt without the guilt."

The only fuel economy figure supplied by Volvo is 13 L/100 km, which is not on the low side.

While the amount of guilt is open to question, the amount of grunt isn't, and that's the key selling point of this new model. The 4.4-litre engine produces 315 hp and its maximum torque is 320 lb-ft at 3,900 rpm, though from approximately 2,000 rpm and up no less than 273 lb-ft of torque is at the driver's disposal.

It's said to be quick enough to move from 0 to 100 km/h in seven seconds.

Like all the other engines in the Volvo brand, the V-8 had to be fit transversely in the engine compartment, which means it sits sideways under the hood. This is important, says Hans Wikman, Volvo Cars vice-president of large cars, because a transverse engine is helpful in "maintaining the frontal crumple zones in the XC90 and thus not compromise on protective safety."

The new engine is the cleanest gasoline-powered V-8 on the market today, Volvo says. It meets the U.S. ULEV II (ultra low emission vehicle, stage II) requirements and the forthcoming Euro 5 requirements for Europe.

alaw@globeandmail.ca