Volvo Commits Seppuku

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Author: Eric Peters

With gas cheaper than it has been in at least 50 years – strongly suggestive that there is plenty of it available and will be for some time to come – Volvo has announced its decision to build nothing but expensive plug-in hybrid and full-on electric cars beginning after the 2019 model year.

Cue the falling of rose petals.

“This announcement marks the end of the solely combustion engine-powered car,” saith Volvo’s CEO Hakan Samuelsson.

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No, it marks the end of sanity – and very possibly of Volvo as a manufacturer of cars. Well, as a manufacturer of cars that people can actually afford to buy or want to buy and which aren’t massively subsidized by the government – from the assembly line to the moment they drive off the dealer’s lot.

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But why is Volvo – why is the industry – so hell-bent on replacing cars that work with those that do not?

Especially now?

With gas prices going down rather than up?

It is the height of the summer driving season – when gas usually costs the most – and prices remain stable at around $ 2.00 per gallon. People notice this – and shop accordingly. Trying to sell them a hybrid or electric car when gas is cheap is like trying to get a cellulitic fat girl voted in as Miss Universe (though that is probably coming, in the spirit of “diversity”).

Did you know that sales of the Toyota Prius – the only somewhat reasonably priced hybrid car currently on the market – are down? And that Toyota had to give up trying to sell the not-reasonably-priced plug-in version of the Prius? (Which happens to be exactly the type of hybrid that Volvo will be making exclusively two years hence?)

This shouldn’t surprise anyone.

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It is the height of the summer driving season – when gas usually costs the most – and prices remain stable at around $ 2.00 per gallon. People notice this – and shop accordingly. Trying to sell them a hybrid or electric car when gas is cheap is like trying to get a cellulitic fat girl voted in as Miss Universe (though that is probably coming, in the spirit of “diversity”).

Did you know that sales of the Toyota Prius – the only somewhat reasonably priced hybrid car currently on the market – are down? And that Toyota had to give up trying to sell the not-reasonably-priced plug-in version of the Prius? (Which happens to be exactly the type of hybrid that Volvo will be making exclusively two years hence?)

This shouldn’t surprise anyone.

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With gas at about $ 2.00 per gallon, spending $ 2,000 extra to buy a Prius ($ 23,475) vs. an otherwise similar but non-hybrid car like a base trim/four-cylinder Camry – which is actually a larger/nicer car than the Prius – does not make economic sense. It makes even lesssense when you compare the cost of a Prius with the cost of something more directly comparable, such as a Corolla. You can buy one of those for $ 18,500 – which is $ 4,975 less than a Prius.

And about $ 15,000 less than the cost of the plug-in version of the Prius (RIP).

Volvo’s plug-in hybrids will be just as economically untenable – except worse. Because the price uptick will be even higher, given these are luxury cars. And an economical luxury car is as preposterous as a short giraffe.

You will never recoup the initial cost of a hybrid in down-the-road savings unless gas prices at least double – which is there is no sign of them doing, almost certainly because the supply is known to be vast if not essentially limitless.

This is why gas is so cheap. It must be so.

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