Panic buying. Two weeks ago, I mentioned the possibility of replacing the wife’s eight-and-a-half year old Toyota Fortuner with something newer and more fuel efficient. This idea came to mind at a time that we were about to have the first of a series of major price increases. Since then, we have seen prices of diesel more than double in less than 30 days, with some industry experts raising the possibility of reaching as high as P150 per liter.
This situation has created a sudden spike in the demand for electrified vehicles in recent weeks, with some calling it panic buying. Even during my medical check up last week, my doctors did not fail to raise the topic of going electric supposedly due to the rising fuel prices—I say supposedly because I know that money is really not an issue for these guys.
Numerous ‘automotive experts’ and electric vehicle advocates have never been so loud in making their case for EV adoption. And maybe it’s just a coincidence that a lot of these advocates actually represent brands and companies selling some form of electrified vehicle.
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So, does swapping your current petrol or diesel car for a hybrid (HEV), plug-in hybrid (PHEV) or a battery electric vehicle (BEV) make sense? If you look at the math, no. Take the wife’s case for example: Unless she will be downgrading the Fortuner to a small HEV, BEV or PHEV, she will need to shell out anywhere from P700,000 to over P1 million to upgrade to an electrified vehicle similar in size.
P700,000 is equivalent to approximately five years worth of fuel for her use at current prices. And that’s just the fuel cost alone. Once you factor in the bigger depreciation from a new car, higher insurance, home charger installation and other costs, it just does not make sense.
One can argue that she will be getting a new car with the latest tech and lower maintenance, true. But as far as transportation goes, the Fortuner does the job perfectly despite its age, and in typical Toyota fashion it just keeps going.
The math is only half of the story. The automobile will be the second biggest purchase after a home, so it is as much an emotional purchase as a financial one. If financial sense and practicality were the only factors in deciding a new car purchase, then everyone would be driving the smallest, most practical and fuel efficient cars in the market and keep them running as long as they are economically serviceable.
But as human beings, we need to satisfy our emotional needs as well, and it is this emotion that makes each of us want a new car even when we really do not need one. Driving out of the showroom in your 202X model with less than 20 kilometers on the odometer and the new car smell just gives one a sense of great satisfaction and an even greater sense of pride.
So where does that leave us? Simple, if you are really in the market for a new vehicle then it is definitely worth considering a HEV, PHEV or BEV. Which to get is a story for another day, but I always tell friends that it will depend on many factors, most important of which are your lifestyle and how you intend to use the vehicle.
Now if you are not in the market for a new car but think that an electrified vehicle can save you a few bucks at the pump, please rethink your decision, make sure the math works for you.
Finally, if you are not really in the market for a new car but feel that the rising fuel prices has now given you a reason to go electric, or you simply feel guilty burning fossil fuels and want to lower your carbon footprint, I say go for it and satisfy your urge for a new car. Just like my ophthalmologist who is looking into getting a Tesla as an addition to his garage that houses his two Land Cruisers and an Alphard among others.
As I write this, prices at the fuel station around the corner shows that petrol is about P85 per liter and diesel is at P120 per liter. With no clear end in sight for the conflict in the Middle East, who knows how high these prices may go? And because of this, are we really looking to replace our ever-reliable Fortuner?
It is an open possibility and the final decision will depend on what happens in the next
couple of weeks, but let’s just say that we are officially car-shopping. I have been speaking to some former colleagues in the industry and have test drives of the latest electrified vehicles lined up for the missus to try. The Toyota Corolla Cross is one of the cars on our list. In the face of uncertainty, it is human nature to seek a familiar name.
