Hybrids: A Win-Win-Win for Consumers, Businesses, and the Environment

One of the most glaring criticisms of anything that purports to be environmentally friendly is the price tag for everyone involved. Consumers find it hard to pay extra now to save the environment for later, especially when considering the somewhat negligible impact of one person in a world of 6.7 billion; businesses find it difficult to produce products with lower profit margins and higher R&D overhead costs; and the global economic crisis isn’t helping anyone solve either side of this supply/demand conundrum.

One niche industry, however, is beating the odds as it sneaks its way into the mainstream—hybrid cars. According to the Japanese newspaper Nikkei, Honda and Toyoto make an estimated $3,100 of profit per hybrid sold. Sales are posting long-term growth trends, and both automakers are pushing their respective Insight (Honda) and Prius (Toyota) models deeper into their balance sheets.

The Insight, still in its first year of production, is still a few years away from posting a large gross profit margin, but if the trends don’t lie, its profit margin would make it the fourth largest revenue stream behind Honda’s luxury, midsize, and small-car operations. That means money for the automaker.

The numbers belie the conventional wisdom that the financial crisis is stifling long-term considerations. Last year, GM reportedly lost $1,271 per car sold, and Ford lost $451, while Toyota posted $1,715 per car, and Honda $1,259. Hybrids were a big part of the Japanese automakers’ equations.

And consumers seem to be happy, too. Not only do they save money and the environment by using less fuel, each car’s price tag is coming dangerously close to breaking the $20,000 price barrier. The 2010 Prius goes for $21,750, while the Insight, “designed and priced for us all,” according to its new ad campaign, goes for $20,470.

Somehow, Toyota and Honda have turned the hybrid car industry—formerly a losing proposition with shaky technology—into a bona fide money maker. If the economies can be made to work here, in one of the more embattled sectors of the world economy, one can’t help but be hopeful about the future.

Keywords : Toyota, Prius, Honda, Insight, Hybrids, Auto Industry