revise d income statement

Toyota: Breakeven Discussion on the Prius

Continuing the focus of the initial module, here we assess the application of a breakeven analysis to the hybrid context. The focus on the Toyota Prius and the Toyota Highlander denotes an interest in the cost realities relating to the sale of hybrid cars. But for the purposes of data availability, the Prius provides us with the most readily available information. Therefore, a breakeven analysis would focus on the process of marketing this vehicle, and would be comparatively assessed with consideration to counterparts to the Prius such as Ford's hybrid Escape.

The analysis here is applied to the process for the customer of breaking even on the extra expenditures associated with owning a hybrid car through that which is saved on fuel expenditures. According to the market data currently available to us, a duration of roughly three years is allotted for individuals to breakeven with this product. Indeed, "according to a study by Edmunds.com, many hybrid cars now pay for themselves over time. For example, both the Toyota Prius and the Ford Escape hybrid can pay for themselves in just 3 years when gas is $3.00 and you drive at least 15,000 miles per year. Additionally, the Saturn Vue, Camry hybrid and Civic hybrid will pay for themselves in 6 years." (HCB, 1)