GM’s “dual mode” hybrid premium: over $9,000

Ever since I learned the details of GM’s “dual mode” hybrid system, I’ve wondered what they’re going to charge for it. The system is more advanced and generally superior to those offered by anyone else right now, including Toyota. The fuel economy benefits are clear: with this system, fuel economy increases by about 50 percent in city driving and 10 percent in highway driving. But it’s also considerably more complex. And complexity costs money.

But how much? With the Toyota Camry, the Hybrid costs about $2,000 more than the regular four-cylinder Camry when both are comparably equipped. Toyota employs a more complex system with a third electric motor in the Highlander Hybrid. Which might explain why HiHy is priced about $5,000 more than the regular Highlander when both are similarly equipped. The same system adds about $3,600 to the price of the Lexus RX.

GM’s system is more complex still. So how much does it add to a vehicle’s price? Six thousand? Seven? Eight?

Well, I’ve now added the pricing for the Chevrolet Tahoe Hybrid and the GMC Yukon Hybrid to TrueDelta’s database. And the actual premium is over $9,000: $9,240 at MSRP and $9,397 at invoice. A loaded Tahoe Hybrid lists for $55,800. Similarly load up a Tahoe LT, and the list price is $48,025. The non-hybrid also has a $750 rebate, and includes about $700 in extra features, including foglamps, power recline and lumbar for the front seats, roof rails, and power-adjustable pedals.

I haven’t yet factored in the tax credit you’ll get if you buy the Hybrid. One group, the ACEEE, is estimating $1,800. Assuming you can get the tax credit–and many people cannot because of the Alternative Minimum Tax (AMT)–this still leaves the Hybrid with a $7,600 premium.

Even at this price, GM has been implying that they’re selling the system at a loss. They cooperated with BMW and Mercedes to develop the system. Those companies aren’t used to focusing on cost. Their involvement might have had an impact.

I’ve read many requests for this system in other GM models, and it’s coming to the Saturn VUE and probably some of GM’s midsize sedans as well. But unless they can get the cost down, I doubt many people will be putting their money where their mouth is.

Update: GM recently added $1,000 to the rebate of the regular Tahoe. So for the next few weeks at least the premium for the Hybrid is actually over $10,000.