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The ugly economics of green vehicles

It's fair to say that most consumers would prefer a green vehicle, one that has a lower impact on the environment and goes easy on costly fuel (in all senses of the term). The problem is that most people can't – or won't – pay the price premium or put up with the compromises today's green cars demand. We're not all "cashed-up greenies." In 2013, the average selling price of a new vehicle was $32,086. The truth is that most Americans can't afford a new car, green or not. In 2013, the average selling price of a new vehicle was $32,086. According to a recent Federal Reserve study, the median income for American families was $46,700 in 2013, a five-percent decline from $49,000 in 2010. While $32,000 for a car may not sound like a lot to some, it's about $630 a month financing for 48 months, assuming the buyer can come up with a $6,400 down payment. And that doesn't include gas, insurance, taxes, maintenance and all the rest. It's no wonder that a recent study showed that the average family could afford a new car in only one of 25 major US cities. AutoTrader conducted a recent survey of 1,900 millennials (those born between 1980 and 2000) about their new and used car buying habits. Isabelle Helms, AutoTrader's vice president of research, said millennials are "big on small" vehicles, which tend to be more affordable. Millennials also yearn for alternative-powered vehicles, but "they generally can't afford them." When it comes to the actual behavior of consumers, the operative word is "affordable," not "green." In 2012, US new car sales rose to 14.5 million. But according to Manheim Research, at 40.5 million units, used car sales were almost three times as great. While the days of the smoke-belching beater are mostly gone, it's a safe bet that the used cars are far less green in terms of gas mileage, emissions, new technology, etc., than new ones. Who Pays the Freight? Green cars, particularly alternative-fuel green cars, cost more than their conventional gas-powered siblings. A previous article discussed how escalating costs and limited utility drove me away from leasing a hydrogen fuel cell-powered Hyundai Tucson, which at $50,000, was nearly twice the cost of the equivalent gas-powered version. In Hyundai's defense, it's fair to ask who should pay the costs of developing and implementing new technology vehicles and the infrastructure to support them.

Toyota Europe boss says 'reasonable number' of fuel cell vehicles on the way

We know that Toyota is gung-ho about delivering its first hydrogen fuel cell sedan to early-adopter markets like southern California and part of Japan next year. The Japanese automaker's European H2 plans have long been part of the mix, but a new press release shows just how committed Toyota is to hydrogen all around the world. "The volume will be limited, but they will be visible on the streets" – Didier Leroy Toyota says hydrogen fuel cells are a "major, but logical next step" after the company's pioneering work on gas-electric hybrids for 15 years. Didier Leroy, president of Toyota Motor Europe (pictured), said in a statement that he knows there will be H2 hurdles, and so Toyota will start with "a reasonable number of cars" in Europe. "The volume will be limited," he said, "but they will be visible on the streets." Karl Schlicht, Toyota Motor Europe executive vice president, compares Toyota's current hydrogen progress with where the company was with hybrid's in the not-too-distant past. When it comes to infrastructure and cost, he said, "There is of course a long way to go, as with any game-changing technology, but remember the same was said about hybrid only 10 years ago." You can read the full PR below. We don't remember a lot of people saying the infrastructure for hybrids simply wasn't there in 2004, but maybe we missed that memo. TOYOTA EXECUTIVES SET THE SCENE FOR DELIVERING FUEL CELL TECHNOLOGY 16/04/14 from Toyota The next era in Toyota's technology development is about to become production reality, with the market introduction next year of the company's first hydrogen fuel cell-powered car. It's a major, but logical next step for the company, as it builds on the success it has achieved with hybrid over the past 15 years. Karl Schlicht, Executive Vice President of Toyota Motor Europe, is explicit about Toyota's commitment to hydrogen power and the potential of fuel cell vehicles to deliver on the company's ambitions to develop the ultimate eco-car. He says: "Our unique hybrid history and experience have proven invaluable for the next big leap. Back in 2010, we promised our first fuel cell car for 2015 and we are fully on track to honour our commitment. "Fuel cell is a technology that can secure our concept of personal mobility. That's because fuel cells combine the strengths of EVs (electric vehicles) and hybrids, with those of conventional cars.

Toyota Camry incentives and fleet sales cranked to keep sales crown, insiders worried

We've been watching for some time now as Toyota has piled more incentives on the hood of its Camry sedan, and Automotive News reports that the we're not the only ones with raised eyebrows. The current Camry hasn't even been on the market for two years, but the family sedan segment is more hotly contested than it has been in years. It's that high level of competition that has led the automaker to uncharacteristically add more money on the hood in order to assure it maintains its long-held title of America's Best-Selling Car, a mantle it has owned for a dozen years. It's ramping up fleet sales, too.
According to the analysts at TrueCar, Toyota has bumped incentives per unit every month this year, now totaling some $2,750 as of May, a 38-percent hike over this time last year. That's more spiff money than the segment's other best sellers, the Nissan Altima ($2,400), Ford Fusion ($2,300) and Honda Accord ($1,400), all of whom have actually decreased their incentive spend by 20- to 40-percent over the same period.
The ramp up in incentive spending and fleet sales has analysts concerned that Toyota will tarnish the Camry's historically sterling resale value. ALG pegs the 2013 Camry's current 36-month residual value at 54.4 percent, well ahead of the segment average's 50.9 percent (but shy of the Accord's 55.6 percent). However, analysts are concerned that as the current generation ages, their resale values will eventually plummet if incentives continue to increase as Toyota looks to keep the Camry's best-selling car crown going forward.