Price Comparison: Toyota Camry Hybrid v Prius PHEV at NAIAS 2012

Kind of interesting comparison at the NAIAS 2012. Could that $7,500 taxpayer subsidy have a part to play?

Fact is, the larger and more luxurious Camry Hybrid at the NAIAS 2012 is indeed shown to be priced less than the smaller, less luxurious plug-in Prius. Wonder how that will work out real life?

This comparison is not a against Toyota at all, but about how marketing and government subsidies create strange product avails. Both cars have a place in America’s heart as a transport vehicle. Still, one has to wonder about that inverted price delta.

In times past, greater luxury always trumped smaller size. Not so this time. That lithium-ion battery in that plug-in Prius is the culprit. And I thought technology was supposed to save money. Well, it does in this case, but not upfront.

In the mutual fund industry, this is called an upfront load; meaning you pay the management fee upfront rather than out of your profits. This may not be the best comparison, but it proves a point. Upfront is still upfront. Now remove that subsidy and see what you get. The lithium-ion battery costs too much money!

I am fully aware that lithium-ion battery technology is in its infancy, actually more like teen age; still, the cost of the development of the technology has been high. Green heads will cite ad nausea that it will take even greater time for the cost to come down. So, it is reasonable in their punkin heads that taxpayer subsidies make perfect sense, despite the fact they defile free market Capitalism at its core, and many of those who buy can afford it without the help of OPM (other peoples’ money).

So, since it has been deemed the logical target by the green movement and the government to make it worthy of that $7,500 taxpayer subsidy, is that why the delta in price between the Toyota Hybrid and the Prius Plug-In Hybrid are exactly $7,500?

Let’s review the math. The cost of the Prius starts at $32K, while the Camry Hybrid starts at $25.9K. Figure in that $7,500 subsidy and the cost to the buyer is nearly equivalent. Great, according to the typical green head. Not so fair to many in the public who still cannot afford either. Fact is, that delta is no coincidence. It highlights the fact that lithium-ion batteries are way to expensive. We didn;t see this before when these cars were concepts, but now the prices on the floor show for all to see.

This dichotomy really caught my attention as I was perusing the Toyota display during Press Preview at NAIAS 2012. So, I went a step further, shot a few videos and recorded my comments as they popped into my head. Watch.

Point is, electrification has its limits as in cost; and the IC engine choice is still crucial and will remain crucial. Just recall the study that says 80% of cars even by 2025 will still be IC engines.