DetN Lopez: Hybrids Suck

by Robert Farago

Published: January 7th, 2009

Wow, Manny. You need to get with the program bro’. Dissing hybrids is not gonna make you any friends. Not in DC. And not with your hometown homies, who know that global warming is a crock of “I can’t believe it’s not Toyota” with which to butter their bailout bread. What are they gonna say when they read this? “They cost more than most people can — or will — pay; they provide fuel efficiency benefits only for specific and limited driving conditions; and the technology isn’t going to solve America’s oil issues. Sure, they’re still somewhat trendy, and select members of Congress as well as Hollywood hypocrites regularly remind people that they drive the so-called green machines. Good for them and for the few others in America who are all hopped up on hybrids, but they are the few and the proud. And the declining.” Yeah, we know that Manny. But what if gas prices go back up? You know; if there’s a sudden disruption of oil supplies due to tensions in the Middle East or another speculative bubble? It could happen. Not in Manny’s world. And the News’ Auto Editor wants to point out– again– that consumers are friggin’ hypocrites…

“That’s not to suggest that hybrids don’t have a place in the market. They do, but it’s a niche, where it belongs. Don’t blame me for that. Blame consumers. There’s a difference in what people say they want and what they buy. And when people put their money on the table, most high-tail it away from the $3,000 or more premium for a hybrid.”

Shoulder chip much? You don’t know the half of it. So here’s the other half:

“Unfortunately, in the end, legislators and activists have been better at grandstanding and casting aspersions at those who don’t play their game, but if the car companies are smart and follow the market’s lead, they’ll keep building what people buy, not what others tell them to build.”

I think GM and Chrysler lost that option when they went bankrupt and hoovered-up $32.4b (not including GMAC) form Uncle Sugar. He who owns the gold Manny.

Robert Farago

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2 of 42 comments

Holydonut on Jan 08, 2009

@ pch101... All cars have tooling and marketing costs. You don’t think that a Ford Mustang has marketing costs? Thank you for re-affirming my prior notion that most people do not care to understand all-in costs for a vehicle. The common belief is that cars just show up because someone dreams them up. It's silly to think that way and you know it. Volume automakers sink billions so you can go into a showroom and buy that car. And all this investment needs to be paid back. You are asserting that because all cars have tooling and advertising, then it doesn't matter what car you sell since these costs magically get paid back when you sell cars. Here's a word of advice - when you are running your car company, you cannot just set your ad budget to whatever you feel like because you think the costs will take care of itself. I think you really have a shot at running a failing automaker. You obviously have some notion in your mind that you know what is right - and in light of actual numbers and math you just ignore those things. Then you have fun logic (well things that are good have to make money - ergo we must make good things). In my prior posts - I showed how the capex spending for Toyota (converted to US dollars) was multiple billion dollars per year. Assuming how many product and powertrain launches they go through per year, you're talking many billions of spending to pull of each car. These costs don't go away just because you want them to. As I mentioned in my first post, Toyota is the most promising company to make this hybrid thing work from an all-in perspective. The industry already knows their variable margin is positive; and they also know it cost them many billions to execute a unique program. The other OEMs are not having such a fun time at it, and at the end of the day the pursuit of hybrid is costing Detroit dearly.

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Pch101 on Jan 08, 2009
I showed how the capex spending for Toyota (converted to US dollars) was multiple billion dollars per year. You've never once proven that costs associated with the Prius were exceptional in comparison to other new vehicle launches. You've offered a lot of terse speculation and lengthy expositions of guesswork, but your data has been sorely lacking. I know that the R&D costs were about $1 billion because I've seen sources that confirm it. Here's one example: http://money.cnn.com/magazines/fortune/fortune_archive/2006/03/06/8370702/index.htm If you have trustworthy sources that you can use to prove your position, I'd like to see it. But if you are simply going to continue your argument based upon a hope that expenses associated with the Prius are considerably different from that of other vehicles, I'm going to want to see some evidence of it.

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