Wednesday, December 21, 2016

Luxury Hybrids

What exactly is the point of a luxury hybrid SUV or a luxury electric car?

Hybrid cars have been with us for over a decade now.  Toyota really created the market with the Prius, and tried to sell it on the premise that it was an economy car - somewhat moderately priced and getting astounding gas mileage.   It has sold well, and by all accounts is a decent, reliable car, like most Toyota products.   Whether the payback justifies the delta in cost, well, that is another matter, and in this era of cheap gas, it gets a lot harder to justify.  And you have to drive the miles to make it cost-effective.   Someone driving 5,000 miles a year is losing money on a Prius.

But a funny thing happened along the way.   Car makers discovered that luxury car buyers would pay extra for hybrid drivetrains.   Elon Musk, rather than trying to make a cheap electric car, has started out at the top of the range with $100,000+ cars, and is working his way down - a strategy that, in retrospect, makes a lot of sense.  GM decided to make a Cadillac version of the Chevy Volt.

What is going on here and do luxury hybrids make any sense?

Traditionally, high-end luxury cars weren't concerned about gas mileage.   You bought a Mercedes or a big 7-series BMW with a huge V-8 or even a V-12, and the fact you were getting very poor gas mileage was part of the status deal.   "Hey, look at me!  I can afford a $100,000 car and I can afford to get 8 miles per gallon!  And the gas-guzzler tax?  I can pay that with the change in my ashtray!  Later plebes!"

So luxury cars - particularly the real high-end ones like Rolls, Bentley, Ferrari, Lamborghini, and even Porsche, got shitty gas mileage (for the most part) and that was part of the appeal.   Particularly in Europe, where gas is pricey and engines are small, having a monster engine under the hood (and a six-liter badge on the fender) was a sign of status.

In the USA, this was less so.   With cheap gas, anyone could afford to buy a cheap car with a monster truck engine in it.  That is, until the insurance rates went crazy and then the Arabs turned off the oil spigot in 1973, and the party was over.

Engines got small and powerless, with the nadir occurring in 1979, with new emissions requirements and carmakers trying to satisfy them with low-compression carburated vehicles.   But by the mid-1980's, fuel injection made possible new engines (or reworked older engines) with gobs of horsepower.   Today, a "base" Mustang or Camaro makes 300 HP and gets 30 mpg on the highway.

So, what is the point of a luxury hybrid?   Well, first, what is the point of a luxury car?   The problem luxury car makers have been having as of late is how to distinguish a luxury car from the stuff the plebes drive.   And every year, this gets harder and harder.

When I was a kid, a "regular" car had crank windows, manual locks, and no A/C.  The big "options" that were becoming standard back then were an automatic transmission, power brakes, and power steering.   That was a "loaded" car back then.   Of course, by then, heaters were standard equipment (an option back in the 1950's!).

So a Cadillac was a "luxury car" by dint of power windows and locks, cruise control, and of course, air conditioning.  Power seats were another "luxury" option.  There were other goo-gaws they liked to put on the cars, like "Twilight sentinel" (automatic headlights) and dorky little mechanical thermometers on outside rear-view mirrors.  Most of this crap was broken, within a few years - even the power windows and locks - making old "luxury cars" even less appealing in the resale market.

If you were to go back in time to 1965, and bring a fairly stripped 2015 Camry with you, people would think it was the most luxurious car in the world.  AM/FM radio with four speakers and a CD player!  Air conditioning!  Power windows and locks!  Cruise control!    Even things like power seats, leather interior, sunroof, alloy wheels, and the like, are available on even the most pedestrian cars today were rare options in 1965 - if they were available at all..   Folks in 1965 would think your "beater" was nicer than the most expensive Caddy on the lot!

Today, our expectations are different.  We expect air conditioning (standard on every car sold in America except the Jeep Wrangler and Chevy Sonic).  We expect power windows, locks, cruise control, keyless entry (that would have blown some minds in 1965!) and a six-speaker stereo with CD player and iPod interface.   That is a pretty stripped car, today.

A "loaded" car might have an upgraded stereo, leather power seats, and a few more doo-dads.  That's about it.

So what makes a car a "luxury" car today?   Well, badge and price mostly.   And the first tells everyone what you spent on the second.   And that is the whole point of luxury cars today - to show people that you spent more money and therefor your worth as a human being is greater.

You think I am kidding, I am not.   It is all about status, plain and simple.

And this is particularly true for "clone cars" - so-called "luxury" brands that include in their lineup, the plebeian cars of the underlying company, re-badged and gussied up to be "luxury" models.

And most carmakers have them.   Toyota/Lexus, Honda/Acura, Nissan/Infiniti, VW/Audi, Chevrolet/Buick.   The same car, often coming down the same assembly line, with the only difference being minor variations in trim or options.   Usually the "luxury" version has everything standard, and the largest engine, and nicer interior materials.   But that's about it.   You can option up a Camry until it is indistinguishable from its Lexus counterpart, except for the badge.

Only a few "luxury" brands have totally stand-alone lineups - BMW and Mercedes.   And of course, there are the really high-end brands, such as Rolls, Bentley, Ferrari and Lamborghini.  While those marques are unique, of course they use a lot of parts from the bins of their corporate parents (BMW, VW, Fiat, and VW, respectively).

But once again, I digress....

Installing hybrid powertrains in luxury brands is a relatively new trend - and perhaps one that is dying off in this era of cheap gas.   The reasons for it are multifold.  First, I think a lot of "luxury" car buyers like to be early adapters - have all the latest gadgets and toys to show off.  So they brag about having a hybrid drive train that gets 45 miles per gallon in a car that cost $30,000 more than its non-luxury counterpart.   Gas mileage really doesn't matter to them, in terms of vehicle ownership cost.

Second is CAFE - Corporate Average Fuel Economy.   To bring up your CAFE numbers, you need to tweak the mileage across the fleet.  So Ford makes pickup trucks out of aluminum, and Toyota puts hybrid drivetrains in a Lexus.  These are not cheap upgrades to make, but make them they must, to meet fuel efficiency standards and allow them to sell more profitable gas-hog models.

It will be interesting to see what happens in the next few years, if oil prices stay low and fuel prices stay low - and the GOP cuts back on CAFE standards.   We may see a lot of this technology get thrown out the window and monster engines come back with a vengeance - they are cheaper to build and have a higher profit margin. 

The good news is, of course, that it won't be as difficult to switch back to fuel-efficient technology when (not if) oil prices skyrocket again.