Let us say an average American drives 15, 000 miles per year; The exact average being 16550 miles.

Let us assume the price of gasoline to be 5$ per gallon, which is much higher than current price in the current range of 4-4.50$ per gallon; a higher price should further support high mileage vehicles like Prius.

and try to compare the total gas expense of Prius, BMW, and Corolla

  1. Toyota Prius which gives ~ 40 miles per gallon [ source] Total gas consumption = 375 gallons Total gasoline expense = 1775$ - let’s take this as our base fuel expense
  2. BMW 3series which gives ~ 20 miles per gallon [ source] Total gas consumption = 750 gallons Total gasoline expense = 3750$ Extra expense over Prius = 2000$. Now, I assume that most BMW owners earn more than 100K or at least pretend to do that, is 2000$ per year that big an expense to pull them away from a luxury BMW?
  3. Toyota Corolla (which gives ~ 30 miles per gallon) [ source] Total gas consumption = 500 gallons Total gasoline expense = 2500$ Extra expense over Prius = 775$

Note: not to forget that Corolla is ~ 7000$ cheaper than Prius Ignoring discounted cash flow analysis, It takes roughly nine years for Prius to pay back the extra premium. If we do a discounted cash flow analysis, it will take even longer.

Clearly, at prevailing gas prices, Prius is neither an economical choice not a luxury choice.

Is Prius a choice for environmentalists

And some who might think that its an environmental choice must realize that “most of the pollution a car generates over its lifetime is generated during the process of actually making the car” and Prius is not the most “green” car out there. EDIT: The following paragraph has been added in response to (first) comment made by Vikram.

As per HowStuffWorks, “If you drive both a conventional and hybrid car for 160,000 miles (257,495 kilometers), the conventional vehicle requires far more energy to operate and emits far more greenhouse gases over its lifetime, significantly canceling out any imbalance during the production stage”.

The ignored “cultural” aspect

Given that 76% of Americans drive alone, a simple fix of “doing carpooling to commute” will bring even a BMW at par with Prius.