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	<title>Comments on: Cost vs. Benefit Revisited</title>
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	<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/</link>
	<description>Pieces of the productivity puzzle.</description>
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		<title>By: Mark Shead</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-87990</link>
		<dc:creator>Mark Shead</dc:creator>
		<pubDate>Thu, 28 Aug 2008 01:39:07 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-87990</guid>
		<description>@Jack - It has been a bit since I looked at the research, but I believe they were trying to account for all the energy involved in creating and transporting the parts, putting it together, and the energy used over the life of the vehicle.</description>
		<content:encoded><![CDATA[<p>@Jack &#8211; It has been a bit since I looked at the research, but I believe they were trying to account for all the energy involved in creating and transporting the parts, putting it together, and the energy used over the life of the vehicle.</p>
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		<title>By: Jack Cutter</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-87919</link>
		<dc:creator>Jack Cutter</dc:creator>
		<pubDate>Wed, 27 Aug 2008 17:31:16 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-87919</guid>
		<description>Good article, but I am uncertain what is meant by total energy cost. Is this the cost of gasoline, plus the cost of electricy used to recharge the batteries, ie the basic costs, or does it also include the manufacturing costs for the vehicle or its components? 
I understand that EPA defines estimated mileage as only the gasoline consumed and does  not consider energy for recharging (or the ethanol or biodiesel as used in other fuels) when conputing mileage costs.
I would like to see basic costs for fuel only that include recharging and total bio-fuels.</description>
		<content:encoded><![CDATA[<p>Good article, but I am uncertain what is meant by total energy cost. Is this the cost of gasoline, plus the cost of electricy used to recharge the batteries, ie the basic costs, or does it also include the manufacturing costs for the vehicle or its components?<br />
I understand that EPA defines estimated mileage as only the gasoline consumed and does  not consider energy for recharging (or the ethanol or biodiesel as used in other fuels) when conputing mileage costs.<br />
I would like to see basic costs for fuel only that include recharging and total bio-fuels.</p>
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		<title>By: Benefits of Expensive Oil : Productivity501</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-82878</link>
		<dc:creator>Benefits of Expensive Oil : Productivity501</dc:creator>
		<pubDate>Wed, 06 Aug 2008 18:29:48 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-82878</guid>
		<description>[...] fuels. When oil is expensive, there are more commercial options for fuel. Even technologies like hybrid vehicles start looking more cost effective. A period of expensive oil gives companies a chance (and [...]</description>
		<content:encoded><![CDATA[<p>[...] fuels. When oil is expensive, there are more commercial options for fuel. Even technologies like hybrid vehicles start looking more cost effective. A period of expensive oil gives companies a chance (and [...]</p>
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		<title>By: Prius vs. BMW : Productivity501</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-69579</link>
		<dc:creator>Prius vs. BMW : Productivity501</dc:creator>
		<pubDate>Sun, 06 Jul 2008 16:28:05 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-69579</guid>
		<description>[...] benefit decisions and illustrated it with the cost benefit of hybrid vehicles and later with the total energy consumption of hybrids. If you enjoyed those discussions, you might be interested in real test between a BMW and a Prius [...]</description>
		<content:encoded><![CDATA[<p>[...] benefit decisions and illustrated it with the cost benefit of hybrid vehicles and later with the total energy consumption of hybrids. If you enjoyed those discussions, you might be interested in real test between a BMW and a Prius [...]</p>
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		<title>By: Norakism</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-3758</link>
		<dc:creator>Norakism</dc:creator>
		<pubDate>Sun, 19 Aug 2007 01:54:04 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-3758</guid>
		<description>&quot;If people can go 400,000km and still have the vehicle in good working order, then they are probably right. I haven’t heard of anyone getting those types of miles out of a hybrid, so thanks for the example.&quot;

Well, below is a story about a Prius taxi that went over 400,000km

http://www.dailytech.com/article.aspx?newsid=8046</description>
		<content:encoded><![CDATA[<p>&#8220;If people can go 400,000km and still have the vehicle in good working order, then they are probably right. I haven’t heard of anyone getting those types of miles out of a hybrid, so thanks for the example.&#8221;</p>
<p>Well, below is a story about a Prius taxi that went over 400,000km</p>
<p><a href="http://www.dailytech.com/article.aspx?newsid=8046" rel="nofollow">http://www.dailytech.com/article.aspx?newsid=8046</a></p>
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		<title>By: Jesse</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1486</link>
		<dc:creator>Jesse</dc:creator>
		<pubDate>Tue, 10 Jul 2007 14:43:01 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1486</guid>
		<description>I meant to say 5%/10km and 50%/20 km</description>
		<content:encoded><![CDATA[<p>I meant to say 5%/10km and 50%/20 km</p>
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		<title>By: Jesse</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1485</link>
		<dc:creator>Jesse</dc:creator>
		<pubDate>Tue, 10 Jul 2007 14:42:24 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1485</guid>
		<description>Good article... you&#039;ve probably realized by now that some people will never accept your conclusion no matter how thought out.

@Brent- I agree with your sentiments, however with your 60%/10km, 80%/20km guideline I believe it is more like 5%/10km and 50 km where I live.  Plus for 4 months of the year when there is over a foot of snow and 5 degrees F (not C) bicycles would be useless. 

Besides there&#039;s more than enough oil if the government would let us drill for it.</description>
		<content:encoded><![CDATA[<p>Good article&#8230; you&#8217;ve probably realized by now that some people will never accept your conclusion no matter how thought out.</p>
<p>@Brent- I agree with your sentiments, however with your 60%/10km, 80%/20km guideline I believe it is more like 5%/10km and 50 km where I live.  Plus for 4 months of the year when there is over a foot of snow and 5 degrees F (not C) bicycles would be useless. </p>
<p>Besides there&#8217;s more than enough oil if the government would let us drill for it.</p>
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		<title>By: Mark Shead</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1313</link>
		<dc:creator>Mark Shead</dc:creator>
		<pubDate>Fri, 06 Jul 2007 13:39:47 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1313</guid>
		<description>@Norakism - Thanks for the thoughtful comment and the links.  Here are a couple thoughts:

&lt;blockquote&gt;
Price needn’t be related to the energy used to make a product. A price premium may be there because the firm wants to make the product exclusive.
&lt;/blockquote&gt;

Actually the car connection article says that Toyota claims the hybrid production process requires more energy than an equivalent non-hybrid vehicle, but they feel that the cost is justified by the savings over the life of the vehicle.  (This tends to support the idea that they are priced higher because of higher energy costs.) 

If people can go 400,000km and still have the vehicle in good working order, then they are probably right.  I haven&#039;t heard of anyone getting those types of miles out of a hybrid, so thanks for the example.  It will be very interesting to see if this is typical.  

The article also says that Toyota is saying that the study was misleading because it was based on existing hybrids and future ones will be more efficient to manufacture and run longer.  This kind of confirms that they may not be the best vehicle to buy right now (unless you just want to help encourage automakers to keep making them).</description>
		<content:encoded><![CDATA[<p>@Norakism &#8211; Thanks for the thoughtful comment and the links.  Here are a couple thoughts:</p>
<blockquote><p>
Price needn’t be related to the energy used to make a product. A price premium may be there because the firm wants to make the product exclusive.
</p></blockquote>
<p>Actually the car connection article says that Toyota claims the hybrid production process requires more energy than an equivalent non-hybrid vehicle, but they feel that the cost is justified by the savings over the life of the vehicle.  (This tends to support the idea that they are priced higher because of higher energy costs.) </p>
<p>If people can go 400,000km and still have the vehicle in good working order, then they are probably right.  I haven&#8217;t heard of anyone getting those types of miles out of a hybrid, so thanks for the example.  It will be very interesting to see if this is typical.  </p>
<p>The article also says that Toyota is saying that the study was misleading because it was based on existing hybrids and future ones will be more efficient to manufacture and run longer.  This kind of confirms that they may not be the best vehicle to buy right now (unless you just want to help encourage automakers to keep making them).</p>
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		<title>By: Norakism</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1275</link>
		<dc:creator>Norakism</dc:creator>
		<pubDate>Thu, 05 Jul 2007 14:59:45 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1275</guid>
		<description>You claim that decisions should be based on facts not marketing. The firm that came out with the report that Hummers were greener than Priuses was done by CNW Marketing Research and its results contradict peer-reviewed scientific journals.

Some reading:
http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf

http://www.truedelta.com/blog/?p=48

http://www.thecarconnection.com/Auto_News/Green_Car_News/Prius_Versus_HUMMER_Exploding_the_Myth.S196.A12220.html?pg=1


&quot;On top of that, if a car costs more to purchase, it seems that the price should somehow be related to the energy that went into making it.&quot;

Price needn&#039;t be related to the energy used to make a product. A price premium may be there because the firm wants to make the product exclusive.


&quot;If you are really concerned about the environment, your best bet is to keep your existing car (assuming it is an average vehicle and not a cement truck) running for as long as possible.&quot;

Have you considered the effect that your old car on the second hand car market will have? On aggregate, all cars are used until they break down. Even if one person sells his car after 50,000 miles then someone else will buy that on the second-hand car market and then sell it, etc.


&quot;I use to drive a 1994 Geo Metro. It only had three cylinders and got between 38 and 55 miles per gallon. The average for normal driving was around 47 or so. That is no worse than what my friends get on their hybrids.&quot;

A Geo Metro is a subcompact, very small lightweight car compared to the more practical and safer and Prius, which is classified as a mid-sized car. When looking at costs versus benefits some may want to look at the benefits of space or the future expected health costs if the car doesn&#039;t have a 5-star crash test rating.</description>
		<content:encoded><![CDATA[<p>You claim that decisions should be based on facts not marketing. The firm that came out with the report that Hummers were greener than Priuses was done by CNW Marketing Research and its results contradict peer-reviewed scientific journals.</p>
<p>Some reading:<br />
<a href="http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf" rel="nofollow">http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf</a></p>
<p><a href="http://www.truedelta.com/blog/?p=48" rel="nofollow">http://www.truedelta.com/blog/?p=48</a></p>
<p><a href="http://www.thecarconnection.com/Auto_News/Green_Car_News/Prius_Versus_HUMMER_Exploding_the_Myth.S196.A12220.html?pg=1" rel="nofollow">http://www.thecarconnection.com/Auto_News/Green_Car_News/Prius_Versus_HUMMER_Exploding_the_Myth.S196.A12220.html?pg=1</a></p>
<p>&#8220;On top of that, if a car costs more to purchase, it seems that the price should somehow be related to the energy that went into making it.&#8221;</p>
<p>Price needn&#8217;t be related to the energy used to make a product. A price premium may be there because the firm wants to make the product exclusive.</p>
<p>&#8220;If you are really concerned about the environment, your best bet is to keep your existing car (assuming it is an average vehicle and not a cement truck) running for as long as possible.&#8221;</p>
<p>Have you considered the effect that your old car on the second hand car market will have? On aggregate, all cars are used until they break down. Even if one person sells his car after 50,000 miles then someone else will buy that on the second-hand car market and then sell it, etc.</p>
<p>&#8220;I use to drive a 1994 Geo Metro. It only had three cylinders and got between 38 and 55 miles per gallon. The average for normal driving was around 47 or so. That is no worse than what my friends get on their hybrids.&#8221;</p>
<p>A Geo Metro is a subcompact, very small lightweight car compared to the more practical and safer and Prius, which is classified as a mid-sized car. When looking at costs versus benefits some may want to look at the benefits of space or the future expected health costs if the car doesn&#8217;t have a 5-star crash test rating.</p>
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		<title>By: brent</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1210</link>
		<dc:creator>brent</dc:creator>
		<pubDate>Tue, 03 Jul 2007 21:47:13 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1210</guid>
		<description>@mark

Manufacturing engineers don&#039;t like to admit it, but Lean Manufacturing relies on volume, volume and volume.

Just like anything (cd players, microwaves, MP3 players) when you start to see the volume of hybrid cars go UP you&#039;ll see the costs go DOWN. Way down. They&#039;ll start to dedicate an entire plant in Mexico to producing the hybrid&#039;s steering wheel. They&#039;ll bring in a line of 4 different hybrids, and use standard parts throughout them all: one reason why hybrids are costly to manufacture at the moment is simply that they&#039;re an entirely new thing. Soon the tooling, plants, IP etc will be amortised and they&#039;ll be able to poor more money into development.

Cost of manufacture shouldn&#039;t be an issue: the more hybrids we buy, the cheaper they&#039;ll be.


@Ariane

I know. You&#039;re right, it doesn&#039;t work for everyone. 

However, I&#039;m convinced that 60% of people live within 10km of where they work, and 80% live within 20km. I think that the roads are mostly congested by people making relatively short, regular, solitary trips. We don&#039;t ALL have to drop off the kids on the way to work.</description>
		<content:encoded><![CDATA[<p>@mark</p>
<p>Manufacturing engineers don&#8217;t like to admit it, but Lean Manufacturing relies on volume, volume and volume.</p>
<p>Just like anything (cd players, microwaves, MP3 players) when you start to see the volume of hybrid cars go UP you&#8217;ll see the costs go DOWN. Way down. They&#8217;ll start to dedicate an entire plant in Mexico to producing the hybrid&#8217;s steering wheel. They&#8217;ll bring in a line of 4 different hybrids, and use standard parts throughout them all: one reason why hybrids are costly to manufacture at the moment is simply that they&#8217;re an entirely new thing. Soon the tooling, plants, IP etc will be amortised and they&#8217;ll be able to poor more money into development.</p>
<p>Cost of manufacture shouldn&#8217;t be an issue: the more hybrids we buy, the cheaper they&#8217;ll be.</p>
<p>@Ariane</p>
<p>I know. You&#8217;re right, it doesn&#8217;t work for everyone. </p>
<p>However, I&#8217;m convinced that 60% of people live within 10km of where they work, and 80% live within 20km. I think that the roads are mostly congested by people making relatively short, regular, solitary trips. We don&#8217;t ALL have to drop off the kids on the way to work.</p>
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		<title>By: Ariane Benefit</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1206</link>
		<dc:creator>Ariane Benefit</dc:creator>
		<pubDate>Tue, 03 Jul 2007 17:21:33 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1206</guid>
		<description>Brent - 

Bio Diesel may not be a perfect solution, but neither is expecting that everyone will live near where they work. It&#039;s a great goal, just not realistic that it could happen soon enough...e.g., my husband engineers building automation and his clients are all over the place.  Some bio-Diesel is made from waste, if we can harness that - I think it&#039;s a good temporary alternative till we do find a better solution.</description>
		<content:encoded><![CDATA[<p>Brent &#8211; </p>
<p>Bio Diesel may not be a perfect solution, but neither is expecting that everyone will live near where they work. It&#8217;s a great goal, just not realistic that it could happen soon enough&#8230;e.g., my husband engineers building automation and his clients are all over the place.  Some bio-Diesel is made from waste, if we can harness that &#8211; I think it&#8217;s a good temporary alternative till we do find a better solution.</p>
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		<title>By: gary</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1202</link>
		<dc:creator>gary</dc:creator>
		<pubDate>Tue, 03 Jul 2007 15:52:07 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1202</guid>
		<description>@Mark

I&#039;m getting behind in my day job :)

I&#039;m not stating that I &quot;believe that a Hybrid vehicle costs less to produce than it’s non-hybrid counterpart&quot;.  I actually don&#039;t know what it costs to produce a particuliar vehicle - hybrid or not.

I&#039;m mainly concerned that you are arriving at a set of conclusions based on a series of assumptions - that because no one has showed you are false - you &#039;assume&#039; must be true.

While it would &#039;seem&#039; that greater complexity = greater production cost, I don&#039;t believe it&#039;s an absolute truth.  Manufacturing on that scale includes many, many factors that influence cost.  Vendor concessions, tax benifits, rebates, as well as soft items like advertising costs and media buys. (example: look at the tremendous free press that Toyota has gotten around the Prius).

Additionaly - new technologies often suffer from a variety of increase costs - but spread over the life of the product (or product line) may actually reduce over all operating expense for production.

I&#039;m not saying you are wrong (hell - I don&#039;t actually know), I&#039;m just saying that you are looking at a very large, complicated issue through a very narrow lenes.  When I see that I&#039;m always skeptical of the results!

-g</description>
		<content:encoded><![CDATA[<p>@Mark</p>
<p>I&#8217;m getting behind in my day job <img src='http://www.productivity501.com/wp-includes/images/smilies/icon_smile.gif' alt=':)' class='wp-smiley' /> </p>
<p>I&#8217;m not stating that I &#8220;believe that a Hybrid vehicle costs less to produce than it’s non-hybrid counterpart&#8221;.  I actually don&#8217;t know what it costs to produce a particuliar vehicle &#8211; hybrid or not.</p>
<p>I&#8217;m mainly concerned that you are arriving at a set of conclusions based on a series of assumptions &#8211; that because no one has showed you are false &#8211; you &#8216;assume&#8217; must be true.</p>
<p>While it would &#8217;seem&#8217; that greater complexity = greater production cost, I don&#8217;t believe it&#8217;s an absolute truth.  Manufacturing on that scale includes many, many factors that influence cost.  Vendor concessions, tax benifits, rebates, as well as soft items like advertising costs and media buys. (example: look at the tremendous free press that Toyota has gotten around the Prius).</p>
<p>Additionaly &#8211; new technologies often suffer from a variety of increase costs &#8211; but spread over the life of the product (or product line) may actually reduce over all operating expense for production.</p>
<p>I&#8217;m not saying you are wrong (hell &#8211; I don&#8217;t actually know), I&#8217;m just saying that you are looking at a very large, complicated issue through a very narrow lenes.  When I see that I&#8217;m always skeptical of the results!</p>
<p>-g</p>
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		<title>By: Mark Shead</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1201</link>
		<dc:creator>Mark Shead</dc:creator>
		<pubDate>Tue, 03 Jul 2007 14:49:15 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1201</guid>
		<description>@Brent - I have a great concern that people will succumb to marketing hype for things like hybrid vehicles and bio-diesel and that the attention focused in there areas will cause us to overlook areas where we could truly save energy--especially things that require us to change our culture.

Better public transportation, cities designed around pedestrian traffic, and working from home are all things that could make a big difference in how we use energy.  But since they require us to change the way we approach our lives, they aren&#039;t going to be looked at seriously if everyone is busy looking at flashy marketing materials.</description>
		<content:encoded><![CDATA[<p>@Brent &#8211; I have a great concern that people will succumb to marketing hype for things like hybrid vehicles and bio-diesel and that the attention focused in there areas will cause us to overlook areas where we could truly save energy&#8211;especially things that require us to change our culture.</p>
<p>Better public transportation, cities designed around pedestrian traffic, and working from home are all things that could make a big difference in how we use energy.  But since they require us to change the way we approach our lives, they aren&#8217;t going to be looked at seriously if everyone is busy looking at flashy marketing materials.</p>
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		<title>By: Mark Shead</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1200</link>
		<dc:creator>Mark Shead</dc:creator>
		<pubDate>Tue, 03 Jul 2007 14:40:33 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1200</guid>
		<description>&lt;p&gt;@Gary - I agree that the markup on hybrids is likely to be higher. However, it sounds like you believe that a Hybrid vehicle costs less to produce than it&#039;s non-hybrid counterpart.&lt;/p&gt;
&lt;p&gt;Here is a thought experiment: Take a Civic and a hybrid Civic that are otherwise identical.  Give these two cars to a research organization and ask them to tell you which costs more to produce.  They will take apart the entire car and look at all the individual components and how they are assembled.  Can you imagine any scenario, where they would come back saying that the hybrid was less expensive to produce?&lt;/p&gt;
&lt;p&gt;If you think the hybrid car is less expensive to produce, then we can stop here because our basic assumptions diverge and we are unlikely to be able to proceed with any meaningful discussion without actually  getting the data.&lt;/p&gt;
&lt;p&gt;If you agree that the hybrid vehicle is going to be more expensive to produce, then the next step is to ask why.  There are two possible reasons.  One is that it requires more complexity--more parts, more assembly, etc.  The second possibility is that it is manufactured with much more expensive processes that are less efficient in terms of production, but better for the environment.&lt;/p&gt;
&lt;p&gt;If the second option was true, I would assume that car companies would be touting that even more than the gas savings.  They aren&#039;t, so it seems reasonable to assume that the cars are more expensive because they are more complex and this complexity is the result of using a variety of components all manufactured using traditional processes.&lt;/p&gt;
&lt;p&gt;I contend that if you take two products of the same type and one is more complex, this complexity requires more energy to produce.  In hybrid cars, this complexity is not only in the assembly process but also in the types of components and materials required.  This means that the components purchased from other companies must be made and shipped.  It also means that there are many more processes that go into the manufacture of the batteries, electric motors, etc.&lt;/p&gt;
&lt;p&gt;There are two reasons I&#039;ve heard people give for buying a Hybrid vehicle:&lt;/p&gt;
&lt;p&gt;1. They will save money in gas.&lt;br /&gt;
2. It is better for the environment.&lt;/p&gt;
&lt;p&gt;Regarding the first item, I have been unable to come up with any scenario involving normal use where the total savings associated with a hybrid vehicle is greater than it&#039;s gas only counter part.  I&#039;m interested if anyone has been able to come up with &lt;em&gt;any&lt;/em&gt; scenario where it is less expensive.&lt;/p&gt;
&lt;p&gt;Regarding the second, the complexity of making a hybrid vehicle is such that people should assume that the manufacturing processes will more than offset the small gas savings in terms of total environmental pollution.  &lt;/p&gt;
&lt;p&gt;If there is any evidence to suggest that the manufacture of hybrid vehicles actually produce less pollutants than their non-hybrid counterparts, I am very open to hearing about it. I&#039;m just trying to point out that people are not doing an even basic level of cost benefit analysis in their heads before purchasing a hybrid.  I have nothing against people buying hybrids, SUVs, or any other type of car.  People can buy whatever they want. It appears that people don&#039;t even do a small amount of cost benefit analysis on a purchase as large as a new vehicle. How likely is it that they will make bad decisions about little things on a daily basis?  How likely is it that we are making incorrect cost benefit decisions about how we spend our time?&lt;/p&gt;
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		<content:encoded><![CDATA[<p>@Gary &#8211; I agree that the markup on hybrids is likely to be higher. However, it sounds like you believe that a Hybrid vehicle costs less to produce than it&#8217;s non-hybrid counterpart.</p>
<p>Here is a thought experiment: Take a Civic and a hybrid Civic that are otherwise identical.  Give these two cars to a research organization and ask them to tell you which costs more to produce.  They will take apart the entire car and look at all the individual components and how they are assembled.  Can you imagine any scenario, where they would come back saying that the hybrid was less expensive to produce?</p>
<p>If you think the hybrid car is less expensive to produce, then we can stop here because our basic assumptions diverge and we are unlikely to be able to proceed with any meaningful discussion without actually  getting the data.</p>
<p>If you agree that the hybrid vehicle is going to be more expensive to produce, then the next step is to ask why.  There are two possible reasons.  One is that it requires more complexity&#8211;more parts, more assembly, etc.  The second possibility is that it is manufactured with much more expensive processes that are less efficient in terms of production, but better for the environment.</p>
<p>If the second option was true, I would assume that car companies would be touting that even more than the gas savings.  They aren&#8217;t, so it seems reasonable to assume that the cars are more expensive because they are more complex and this complexity is the result of using a variety of components all manufactured using traditional processes.</p>
<p>I contend that if you take two products of the same type and one is more complex, this complexity requires more energy to produce.  In hybrid cars, this complexity is not only in the assembly process but also in the types of components and materials required.  This means that the components purchased from other companies must be made and shipped.  It also means that there are many more processes that go into the manufacture of the batteries, electric motors, etc.</p>
<p>There are two reasons I&#8217;ve heard people give for buying a Hybrid vehicle:</p>
<p>1. They will save money in gas.<br />
2. It is better for the environment.</p>
<p>Regarding the first item, I have been unable to come up with any scenario involving normal use where the total savings associated with a hybrid vehicle is greater than it&#8217;s gas only counter part.  I&#8217;m interested if anyone has been able to come up with <em>any</em> scenario where it is less expensive.</p>
<p>Regarding the second, the complexity of making a hybrid vehicle is such that people should assume that the manufacturing processes will more than offset the small gas savings in terms of total environmental pollution.  </p>
<p>If there is any evidence to suggest that the manufacture of hybrid vehicles actually produce less pollutants than their non-hybrid counterparts, I am very open to hearing about it. I&#8217;m just trying to point out that people are not doing an even basic level of cost benefit analysis in their heads before purchasing a hybrid.  I have nothing against people buying hybrids, SUVs, or any other type of car.  People can buy whatever they want. It appears that people don&#8217;t even do a small amount of cost benefit analysis on a purchase as large as a new vehicle. How likely is it that they will make bad decisions about little things on a daily basis?  How likely is it that we are making incorrect cost benefit decisions about how we spend our time?</p>
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		<title>By: gary</title>
		<link>http://www.productivity501.com/cost-vs-benefit-revisited/219/comment-page-1/#comment-1198</link>
		<dc:creator>gary</dc:creator>
		<pubDate>Tue, 03 Jul 2007 11:52:44 +0000</pubDate>
		<guid isPermaLink="false">http://www.productivity501.com/cost-vs-benefit-revisited/219/#comment-1198</guid>
		<description>@Mark..

Mark - you are confusing &#039;costs&#039; with &#039;price&#039;.  You&#039;re argument may be accurate that the technologies used to produce the new line of hybrid vehicles has a relativity higher energy &#039;cost&#039; (I don&#039;t personally know that to be true, nor do I know that to be false).

But to assume that higher manufacturing &#039;costs&#039; lead directly to higher &#039;price&#039; is an incorrect assumption.  Many things influence the price set for a particuliar item by it&#039;s manufacturer.  Demand being a significant one.  Until very recently, in my community, there was a 12-month waiting list for the Toyota Prius.  There was zero incentive for the dealer to lower his &#039;price&#039;.

Your analysis of &#039;costs&#039; is interesting and informative - however it is only one slice of the overall pie that should be considered.</description>
		<content:encoded><![CDATA[<p>@Mark..</p>
<p>Mark &#8211; you are confusing &#8216;costs&#8217; with &#8216;price&#8217;.  You&#8217;re argument may be accurate that the technologies used to produce the new line of hybrid vehicles has a relativity higher energy &#8216;cost&#8217; (I don&#8217;t personally know that to be true, nor do I know that to be false).</p>
<p>But to assume that higher manufacturing &#8216;costs&#8217; lead directly to higher &#8216;price&#8217; is an incorrect assumption.  Many things influence the price set for a particuliar item by it&#8217;s manufacturer.  Demand being a significant one.  Until very recently, in my community, there was a 12-month waiting list for the Toyota Prius.  There was zero incentive for the dealer to lower his &#8216;price&#8217;.</p>
<p>Your analysis of &#8216;costs&#8217; is interesting and informative &#8211; however it is only one slice of the overall pie that should be considered.</p>
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