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Why greener cars can cost more

16 June 2008
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Cars powered by relatively small engines that use established engine technology can be satisfyingly affordable and environmentally friendly, but models that use newer technology can cost much more.

The reason is that manufacturers need to recoup the cost of developing new technologies such as hybrids, and these cars also use expensive parts, including lighter-weight materials and high-tech li-ion (lithium-ion) batteries.

With comparatively small sales, hybrids also don't enjoy the same economies of scale as conventionally powered cars, which pushes up the price as well.

However, as the technology becomes more available and more people adopt it, the cheaper these types of vehicles should get. Toyota has predicted it will enjoy the same profit on its hybrid cars as it does on conventionally powered models by 2010.

While that doesn't mean they'll cost the same as conventionally powered alternatives, it's certainly a step in the right direction.

Beyond hybrid power lies even newer emergent technology, such as fuel cells that run on hydrogen rather than fossil fuels.

There are some formidable technical hurdles to overcome before it's a practical alternative, however, so you can bet that the first hydrogen-powered cars you'll be able to buy – perhaps in 2015 or so – will cost you a pretty penny.

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