Needed: A Really Cheap Hybrid (Listening, Honda?)
The path to profitability with hybrid and battery electric cars may not be at the top of the market—as Fisker and Tesla are assuming—but at the bottom. Take a look at the price wars developing between Honda and Toyota over, respectively, the Insight and Prius. And that’s only the beginning.
When Honda announced that its mid-sized Insight sedan would open at $19,800, it was a shocker to Toyota, which had not yet announced pricing on the 2010 Prius. Getting into a 2009 model costs $23,375 plus $720 in destination charges. And since the new model is moving slightly upmarket—with standard features such as stability and traction control—it was generally assumed that pricing would stay the same or even increase. Instead, it fell, to $21,000.
That price is somewhat misleading, however. Toyota’s Wade Hoyt says the $21,000 car is intended mainly for fleets and will not carry such features as a rear wiper, cruise control, Touch Tracer Display and EV mode (which allows a short batteries-only run). Prius II, the one consumers can get at, starts at $22,000.
But Honda isn’t finished making entry-level hybrids. Coming soon is a hybrid version of the popular Fit (called the Jazz in Europe). The Fit Hybrid, confirmed, along with a sporty hybrid based on the CR-Z, by CEO Takeo Fukui (who will step down in June) a year ago, may not be sold in the U.S. But it would be a good, well, fit.
“The Fit has great fuel efficiency to begin with, and if you put in a hybrid, it’s going to get even better,” Fukui said last year. At the time, gas was $4 a gallon, but now the recession is a great reason to make a really fuel-efficient hybrid that is also affordably priced. Hybrids have taken a hit in the marketplace, and their higher prices is one big reason.
A sweet spot in the market for Honda would be around $17,000. The Insight is already the cheapest hybrid on the market, but with the Fit joining a hybrid lineup of Insight and Civic, the company would have all the entry-level bases covered. Just a thought!
Jim Motavalli is the author of Forward Drive: The Race to Build Clean Cars for the Future, among other books. He has been covering the environmental side of the auto industry for more than a decade, and writes regularly on those topics for the New York Times.
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