If you have a little patients, this could be an interesting blog. What I am going to do is to compare the Honda Civic with the Toyota Pries with a little 4th grade math. The Pries gets better mileage, but has a higher cost than the Civic. The Pries costs $33,600 and the Civic costs $28,400. I assumed that both will be driven 15,000 miles per year for a life of 240,000 miles over 16 years. Further, I use 5% for the time value of money since the cost of the cars is today and the possible savings come in over a period of 16 years. To not take this fact into account is a serious error made by most 4th graders. Now the numbers.
The Civic driven 15,000 miles per year at 35 mpg will require 429 gallons of gas at $4.00 per gallon for a total of $1,716. The Pries driven for the same 15,000 miles getting 40 mpg will on need 375 gallons of gas and at $4.00 per gallon, it will only cost $1,500. The savings for the Pries is $216 per year. Sounds good so far. Now, the difference between the prices of the cars is $5,200. Next, we need to apply the 5% capital recovery factor. You can get this from most interest tables, it is 0.092. This means that we need to allow $478 per year to take this difference into account.
Notice that the savings is only $216 per year while the extra cost of the Pries is $478 per year. Now, even the average 4th grader can figure that it will cost them $262 more per year for the Pries. What we have done here is to just consider the difference in the cost of the new cars. We have not even taken into account the very high cost of replacing the battery and it is clear that the Pries is a "bad" choice. We are talking about a car that is expected to last for a total of 16 years. The best that I can estimate is that the Pries will need at least 2 battery replacements and we are talking about upto $5,000 for each battery. That means we could add an additional $920 per year just for battery replacement. Notice that to offset this extra cost, the Pries owner would have to find gas for $1.55 per gallon to come out on their investment. No chance.
This is just 4th grade math and see what we find. I know that most of you can do 4th grade math, so why don't you and expose the fraud of green energy?
