| Posted on May 6, 2010 at 11:14 AM | 
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I find the ongoing innovation in car technology to be fascinating reading. The manufacturers are now falling over themselves to produce greener cars and trumpet the credentials of their new product in terms of its economy, emissions levels and costs. However, I find it curious that buyers have to pay a premium for a green car.
This price uplift can no doubt be explained by the manufacturers as being necessary to recoup the development costs of the technology integrated in to the vehicle that makes it so green but lessons can be learned from other consumer product industries where lower prices (and therefore margins) significantly increase demand, thereby speeding the return on investment. Is it not better to sell 1000 hybrid cars at a lower price than 100 at a higher price? In pure carbon terms is it not better to have 1000 hybrids on the road, thereby displacing 1000 higher-emitting vehicles?
Also, if the focus of green car technology is to get lower emitting vehicles in drivers’ hands, why are green engine options not cheaper than regular petrol or diesel drive packages to encourage more of us to choose a lower-emitting option? Everybody wins in this instance – the driver gets a greener, cheaper car to run, the manufacturer has a retail sale (and revenue) and the planet gets less carbon to deal with.
Financially, green cars are increasingly making sense as variety and supply increases on both the retail and second hand market, especially if you live in an area with a congestion charge. As an example, a second hand Honda Insight can be had on Autotrader with 4000 miles on the clock for £12,900. It attracts no annual road tax charge and if you live in London and commute to work 250 times a year (50 weeks of 5 days) then it would save you £2000 of Congestion Charge. If you added in a saving of £155.00 per annum for the reduced road tax (compared against a petrol vehicle emitting 151-165g/km) then the Insight would pay for itself in just under 6 years. This is before you even factor in the fuel saving of having a more efficient car and any trade-in or resale value.
Encouragingly, the manufacturers now seem to be expanding their product offerings to include more variety in their eco ranges – from small town cars to family hatchbacks and even sports cars (see Honda’s CR-Z). This should broaden the appeal and finally see the acceptance of green cars across the wider market.
This price uplift can no doubt be explained by the manufacturers as being necessary to recoup the development costs of the technology integrated in to the vehicle that makes it so green but lessons can be learned from other consumer product industries where lower prices (and therefore margins) significantly increase demand, thereby speeding the return on investment. Is it not better to sell 1000 hybrid cars at a lower price than 100 at a higher price? In pure carbon terms is it not better to have 1000 hybrids on the road, thereby displacing 1000 higher-emitting vehicles?
Also, if the focus of green car technology is to get lower emitting vehicles in drivers’ hands, why are green engine options not cheaper than regular petrol or diesel drive packages to encourage more of us to choose a lower-emitting option? Everybody wins in this instance – the driver gets a greener, cheaper car to run, the manufacturer has a retail sale (and revenue) and the planet gets less carbon to deal with.
Financially, green cars are increasingly making sense as variety and supply increases on both the retail and second hand market, especially if you live in an area with a congestion charge. As an example, a second hand Honda Insight can be had on Autotrader with 4000 miles on the clock for £12,900. It attracts no annual road tax charge and if you live in London and commute to work 250 times a year (50 weeks of 5 days) then it would save you £2000 of Congestion Charge. If you added in a saving of £155.00 per annum for the reduced road tax (compared against a petrol vehicle emitting 151-165g/km) then the Insight would pay for itself in just under 6 years. This is before you even factor in the fuel saving of having a more efficient car and any trade-in or resale value.
Encouragingly, the manufacturers now seem to be expanding their product offerings to include more variety in their eco ranges – from small town cars to family hatchbacks and even sports cars (see Honda’s CR-Z). This should broaden the appeal and finally see the acceptance of green cars across the wider market.
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