Like Wulf, I'm disinclined to government intervention where the market should operate and I'm no fan of Dr. Robert Zubrin's suggestion that "Congress should immediately require that all future vehicles sold in the U.S.A. be flexible-fueled", but I can certainly see the value of structuring our economy such that the flex fuel alternative is not actively discouraged by tariffs or tax policies that reward probable dead-ends like hydrogen or electric powered vehicles.I have to agree with Jon. I find the hybrid tax credit especially irksome because it is really the only think keeping those cars economically competitive.
Let us do a simple mathematical experiment. The hybrid civic retails at $22,150.00 and the equivalent Civic LX retails at $16,710.00 for manual transmission. The LX averages about 35 mpg, the hybrid about 50. So you are spending $5.5k to get about 15 mpg. Maybe more, maybe less depending on dealer prices and your daily driving. If we assume gas is $3.00/US gallon, that means you have to drive over 210,000 miles to break even on fuel economy alone. With the current $2000 tax credit, that number is only 100,000 miles. 210k is probably a pipedream, but 100k is doable for most people. Yes this analysis is pretty simplistic and makes a lot of assumptions of mediocre worth, but you get the point. Hybrids really aren't that great economically and economy is the only reason to drive them. Lord knows they don't accelerate or handle well.
But really my problem is this. Thanks to modern environmentalism our mindset is stuck on conservation. This doesn't work. Conservation doesn't raise efficiency fast enough to keep up with increasing demand. What we need is more or new sources of production because increased efficiency just doesn't pay off as an investment.
UPDATE: This is in the comments, but Haloscan has a tendency to make those disappear so I'm reposting it here. Michael had this to say:
I don't think 210,000 miles on a Honda or a Toyota is a pipe dream. My wife's first car, 1989 Toyota Corolla, had a tad over 400,000 miles on it and still got 38 mpg.My boss has 250,000 miles on his Maxima too, but these cases aren't the norm. I'm guessing most people have a vehicle lifetime of 100,000 to 200,000 miles if they take proper care of the car.
Depending on the miles a driver puts on their car, recouping initial investment in gas savings may take anywhere from 8 (my commute) to 17 years (warrantee standard 12k/year). That is far too long. Toyota estimates the vehicle life of their Prius to be eight to ten years, which is also approximately the life of the battery pack. I would think you would want to recoup the investment by the time you paid off the car loan, so 5 years or less. "Pipedream" is an overstatement because yes you might be able to do it, but I don't think that 210,000 is a good return on investment in any way shape or form.