today I wrote to US Senator Gordon Smith (R-OR), who's on the Senate Energy and Natural Resources Committee and who's one of my two Senators. I cc'd the other Senator (Ron Wyden, D) FWIW to this group. Anyone care to write your Senators?<br><br>[On the just-passed House bill]<br>Dear Senator Smith,<br><br>Here's where I stand:<br><br>Conservation First: <br><br>How can anyone reasonably estimate the nation's future energy needs without taking into account what increases in efficiency and conservation efforts can do to help out? I don't hear any of our leaders pointing out the obvious benefits of increasing conservation measures. <br><br>Promote Conservation Before Promoting New Energy Production:<br><br>The better we get at reducing per capita consumption of gasoline and electricity, the fewer new sources we'll need. Let's encourage all future-minded citizens and organizations to get on the conservation band-wagon -- now! <br><br>Pay People and Organizations to Conserve: <br><br>Use tax credits and deductions to stimulate the production and use of ever more fuel-efficient products and processes. There's a great example right here in Oregon, where purchasers of new hybrid gas-electric cars (Honda Insight or Toyota Prius, for example) could get a nice tax credit from the state last year. These are not experimental cars; they are fully functional vehicles which produce their own electricity and get terrific gas mileage. <br><br>Combine Better Energy Efficiency with Lower Environmental Impact:<br><br>In the Honda Insight and Toyota Prius we're looking at SULEV's: Super Ultra Low Emission Vehicles. The Prius emits half the CO2 and one-tenth the NOX of conventional gasoline-only engines. (see: <a href=http://www.toyota.com/prius target=new>http://www.toyota.com/prius</a>)<br> <br>Don't Let Detroit Deceive Americans:<br><br>Let's debunk this Detroit-sponsored myth that American car manufacturers can't achieve rapid gains in mileage while still selling vehicles the public will buy. Take the Toyota Prius as an example: A fully loaded five passenger family sedan; 4 doors, auto transmission, power everything, air conditioning, ABS, radio and CD, high-tech security system. Suggested Price $20,855, including destination charge. EPA estimates: 52 City, 45 Highway. That's right, better in town than on the highway. (Of course, your mileage may vary. I'm getting more like 38 in town and 48 on the highway.) This is not new technology. The Prius has been on the road in Japan since 1997 and in the U.S. since last summer. Toyota has sold tens of thousands of these cars, and people are waiting several months to take delivery. If you're thinking, "But this is a Japanese company, and we need to protect American manufacturers..," remember we're in a global economy. Remember also that GM and Toyota currently have a very large joint production facility in California where Prizms / Corollas are made. So, Detroit can team up with makers like Honda and Toyota. Or Detroit can just get up some good old-fashioned "can-do" American gumption and stop telling us they can't do this and they can't do that! Think tax advantages for doing the right thing for the environment and our collective energy future. <br><br>Where do you stand? I hope that you will work with all your influence in the Energy and Natural Resources Committee and with all your enthusiasm on the Senate floor to vastly improve upon what the House has done. We as a nation can and must do better, use less energy, conserve more, and reward those who think of the long-term benefit to our people rather than short-term profit. Thank you.

I totally agree with your positions (maybe that is why I own a Prius :-) and encourage everyone to contact their legislators with a similar message. One small point to keep in mind though is that Toyota is said to be losing at over $10K on every Prius they sell. They are subsidizing the cost very significantly in order to gain real world experience with the technology and to establish their brand in this area. So...the automakers are not really "wrong" when they say the technology is not affordable. That said, we need to drive them to make it affordable.<br><br>Until then: enjoy driving your Prius!

&gt;Toyota is said to be losing at over $10K on every Prius they sell.<br><br>I keep hearing that over and over, but it's really hard to believe. Electric motors are cheap, transistors are cheap, computers are cheap. Batteries aren't yet cheap but not too terribly expensive. In bulk, you can buy 1 watt-hour AA NiMH batteries for a little over a buck in lots of several thousand; that's about $2k for the Prius' 288-volt, 6.5-Ah stack.<br><br>I might believe that a Prius makes $2k - $5k more to make than a comparably featured car without the hybrid drivetrain -- but then, Prii cost $2k-$5k more than comparably featured conventional cars. <br><br>If you include the R&D money and other up-front costs into the Prius, it's likely that Toyota is "losing money" on the first few years -- but that's not real loss, that's just investment. <br><br>On a similar note, how much does it cost to fly on the Space Shuttle? There are lots of different cost estimates, ranging from free (the cost to scientific payload teams) to a billion dollars a launch (what you get by taking the annual cost of the program and dividing by the number of <br>launches). There's no one answer to the question.

You are right of course about the various ways to account for the initial costs. They may be saying they are losing money as a way to position themselves or the car in the marketplace...or even to discourage lawmakers from requiring hybrids or discourage other car makers from going this way faster...who knows.<br><br>One thing I will say, they intend to be a money making organization so they aren't going to intend to lose money over the long term are they!?!

One thing is that "they" have never said they are loosing money, so far as I know. Some salespeople have said it, but it is unattributed. The nearest thing to a reliable source that we have/had (Priusman) has said three things at 2 or 3 different times(as I recall): (1) Some initial cost is being charged to R&D (2) each car does not loose money, (3) over the life of the Prius they expact to turn a modest profit.<br><br>So I suspect that the marginal cost of a Prius is less than the price, but that there are various non-recurring costs that are either being written off or amortized over the life of the model.<br><br>(I think I put a similar not recently in the group. If it was here, and this is a duplicate, my apologies for being like a broken record) (Does anyone know what that means anymore? How about a skipping CD?).<br><br>Burns<br>LOWCO2 - NH