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Author Topic:   The Cost of Horsepower
jimh posted 08-05-2014 12:19 PM ET (US)   Profile for jimh   Send Email to jimh  
I have some reliable data for the MSRP of the new Evinrude E-TEC G2 outboard engines. I thought a little analysis of the cost of horsepower might be fun.

Here is the data. Note, prices are MSRP and are for 25-inch shaft with power steering. I think all four models are built on the same engine block, so the horsepower rating is mostly a result of the fuel map and tuning.

E-TEC G2
200-HP = $23,305 or $116.52/HP
225-HP = $24,735 or $109.93/HP
250-HP = $26,035 or $104.14/HP
300-HP = $27,075 or $ 90.25/HP

Next we look at the incremental cost of horsepower, using the 200-HP as the base:

INCREMENTAL HP

200-HP = $0 or base
225-HP = $1,430 for 25-HP, or $57.2/HP
250-HP = $2,730 for 50-HP, or $54.6/HP
300-HP = $3.770 for 100-HP or $37.7/HP

This gives a buyer an interesting incentive. If a buyer were willing to pay the $116-per-horsepower to get the E-TEC G2 200 model, they could upgrade to a 300-HP for only $37.7-per-horsepower. That seems to me like a strong incentive for opting for the bigger engine.

If pricing had stayed consistent with horsepower, and the 200-HP engine was the benchmark, the 300-HP model should have been priced at $34957.50. Instead, it is a bargin at only $27, 075, or a savings of $7882.50.

I suppose some readers might say this article is just a way for its author to rationalize buying a new E-TEC G2 300-HP engine. There might be some truth to that. Once a buyer has loosened his wallet to drop $23,305 on a new engine, getting another $3,770 from them to get a 50-percent boost in power seems like it ought to happen rather easily.

Also, please, let's not have any comments about how expensive these E-TEC G2 engines are. All outboard engines, particularly when mentioned at their MSRP, are irrationally expensive. You have to think of them more like maritime jewelry than as simple internal combustion engines. I mean, heck, for $27, 075 you can buy rather decent new automobile. Maybe not an AUDI A8, but a nice plain sedan.

jimh posted 08-05-2014 12:22 PM ET (US)     Profile for jimh  Send Email to jimh     
Also, if someone has reliable data about other brands for engine MSRP, let's have a look at them. I don't have any other data myself. And, please, no special models, like "high-output" or "pro" or "stroker" or who knows what. Just the plain models in as many horsepowers as available.
Jeff posted 08-05-2014 01:26 PM ET (US)     Profile for Jeff  Send Email to Jeff     
Similar discussion from 4 years ago around all the gen I e-tecs.

http://continuouswave.com/ubb/Forum4/HTML/007347.html

jimh posted 08-05-2014 01:35 PM ET (US)     Profile for jimh  Send Email to jimh     
Jeff--Great link to a related article. Thanks.

It occurs to me that one might look at the manufacturing costs of these four models. There may be little incremental cost to Evinrude to make the 300-HP compared to the 200-HP model. If there are physical difference, I suspect they would not be very great. One consideration of the cost to Evinrude: the warranty. If Evinrude has to cover the same period and same terms on the engine making 300-HP as they do on the engine making 200-HP, they probably have more exposure to warranty costs. That is based on the notion that the 300-HP engine is going to be running under more load than the 200-HP engine.

If the real costs to Evinrude are very similar for 200-HP and 300-HP models, this suggests that it works to Evinrude's advantage to structure the pricing to encourage more buyers to move to 300-HP. That model will have a greater margin than the 200-HP, so it should produce more profit.

I say all of this as an owner of a boat rated for 300-HP.

kwik_wurk posted 08-05-2014 01:38 PM ET (US)     Profile for kwik_wurk  Send Email to kwik_wurk     
Re 300-HP pricing: if put in reverse, it implies the 200-HP is $7882.50 too expensive.

[Changed topic. Please start a new thread for that topic.--jimh]

jimh posted 08-05-2014 01:45 PM ET (US)     Profile for jimh  Send Email to jimh     
Good point. But your math is off.

The 200-HP, if priced according to the 300-HP as a benchmark, should sell for $18,050, or $5,255 less than it is now.

sraab928 posted 08-05-2014 02:16 PM ET (US)     Profile for sraab928  Send Email to sraab928     
I could be mistaken but I thought the G2 200 was an HO model. If so to use 200hp as the basis for the calculation may be incorrect.
jimh posted 08-05-2014 06:30 PM ET (US)     Profile for jimh  Send Email to jimh     
In the standard E-TEC (not G2) line, the 200-HP V6 3.3-liter is called the H.O. model in order to distinguish it from the 200-HP V6 2.6-liter.

The E-TEC G2 200-HP is not designated as a high output model, and I believe that is because there is no smaller displacement E-TEC G2 200-HP model. There might be, some day, but not at this moment. There are only 3.3-liter or larger E-TEC G2 engines.

I don't see any problem using the E-TEC G2 200-HP as the baseline for price per horsepower. It is, of course, arbitrary. As noted, the 300-HP model could be used as the benchmark, and comparisons made to it.

sraab928 posted 08-05-2014 07:52 PM ET (US)     Profile for sraab928  Send Email to sraab928     
This page shows the E-Tec 200 G2 is H.O. - they also have a 225 & 250 G2 H.O. You cannot buy a non H.O. G2 200

http://www.evinrude.com/en-us/engines/etec_20/etec_200_ho_g2

[Changed topic from the pricing of horspower to the weight and power rating. This new topic is now its own thread in PERFORMANCE--jimh]

jimh posted 08-05-2014 09:08 PM ET (US)     Profile for jimh  Send Email to jimh     
The price list I used seemed to designate only the 20-inch shaft 200-HP E-TEC G2 as "HO" [or I really misread it]. I agree, the website (you have linked) seems to contradict that. In any case, the E-TEC G2 200-HP , H.O. or not, is the basis for my price comparison. Feel free to perform your own calculation based on some other basis of price comparison.

Re the physical similarities, it looks like the 300-HP (and the 250 H.O.) models have the larger displacement, 3.4-liters instead of 3.3-liters, so there certainly is a physical difference from the other models. However, I think the larger displacement is implemented with a longer stroke, so the power head is not radically changed. This is particularly significant because on the G2 the intake and exhaust passages are quite innovative, and if the cylinder bore changed they might need a significant redesign. With the stroke longer, perhaps not so much difference. This suggests the costs are probably not extraordinarily higher to manufacturer the more powerful engines, which, as I have suggested, probably give Evinrude a better margin on them.

sraab928 posted 08-06-2014 05:28 AM ET (US)     Profile for sraab928  Send Email to sraab928     
Jim, I do not wish to re-do the calculations.
jimh posted 08-06-2014 10:15 AM ET (US)     Profile for jimh  Send Email to jimh     
No plans here to re-do the analysis.
Teak Oil posted 08-06-2014 02:00 PM ET (US)     Profile for Teak Oil  Send Email to Teak Oil     
Man this thread makes me feel like I got a bargain on my 300, thanks.
jimh posted 08-06-2014 02:19 PM ET (US)     Profile for jimh  Send Email to jimh     
I have made another mistake: all the G2 engines that Evinrude has announced to date will have the 3.441-liter block. So they are all very similar physically. Again, the point of mentioning this is to support the notions that:

--the price structure seems designed to encourage a buyer to move up in horsepower, as the higher horsepower models are priced proportionally lower for the cost of horsepower; and

--the margins for Evinrude are likely to be better on the more expensive models, given an assumption of nearly fixed cost due to nearly identical engines, physically.

ASIDE: I believe Evinrude has plans to introduce another E-TEC G2 model which may have a variable exhaust porting, a feature known as a RAVE valve. This will be a significant physical difference and should mean a higher cost to build. I do not believe the 300-HP G2 E-TEC has this valve. Perhaps when that model is introduced it will be given a model designation of 300 H.O.--just a guess.

The topic really is not the minutia of the Evinrude engine models, but the general trend in pricing of outboard engines by horsepower. It would be nice if we could get some other manufacturer's data for the MSRP and horsepower of some engines in this same 200 to 300-HP range. I think it will be interesting to look for any trends in the cost of horsepower in those prices. Again, if anyone has any good data on this, please share it.

jimh posted 08-06-2014 02:22 PM ET (US)     Profile for jimh  Send Email to jimh     
Teak Oil says: "...this thread makes me feel like I got a bargain on my 300 [not G2]..."

Yes. I feel the same way about my now-five-year-old E-TEC 225. It was substantially lower in price than the figures above for an E-TEC G2 225-HP.

David Pendleton posted 08-06-2014 04:26 PM ET (US)     Profile for David Pendleton  Send Email to David Pendleton     
Makes me glad I have an IO.
Teak Oil posted 08-06-2014 10:07 PM ET (US)     Profile for Teak Oil  Send Email to Teak Oil     
Jim my understanding was the opposite of yours, I thought I read that the G2 300 would be the ONLY G2 outboard to have the RAVE valves, but I do not see a mention of it on the website so you may be correct.

RAVE valves do not change the peak HP on their own, as they are fully open at wide open throttle. They do allow the engineers to get more radical with the exhaust port design, as the engineers can design bigger ports for optimum flow, but at low speeds the valves make the port smaller while maintaining port velocity and keeping mid range torque at an acceptable level.

jimh posted 08-06-2014 10:16 PM ET (US)     Profile for jimh  Send Email to jimh     
In the context of this discussion, the cost of horsepower, if the E-TEC G2 300-HP did have the mechanical distinction of having a Rave valve--and I don't think it does--that would make it even more of a bargain for the buyer. The engine would be more expensive to manufacture due to the additional complexity, and yet Evinrude would be selling it for proportionally less cost per horsepower than the other models.

The point of the discussion is, again, not to delve into the minutia of Evinrude G2 engines, but to look at the price of them as a function of horsepower. All indicators so far seem to point to the highest horsepower model as being priced the most attractively by a measure of cost-per-horsepower.

Whaler27 posted 08-09-2014 01:39 PM ET (US)     Profile for Whaler27  Send Email to Whaler27     
Just added twin Yamaha 300's 25-inch shafts. MSRP is similar to the E-TEC G2.

[Added data about engine performance. Please post this very interesting data to PERFORMANCE. Thank you. --jimh]

martyn1075 posted 08-11-2014 08:28 PM ET (US)     Profile for martyn1075  Send Email to martyn1075     
As Jim mentioned in the first post any modern outboard engine will be jaw dropping expensive. I look at it as though one is buying a honda civic for the back of their boat. At least right now, but perhaps in a few years we can move up into the Audi stage of pricing. Expensive for what they are, but at the end of the day you have a reliable and modern engineered means of transportation. I guess one could argue in that case then why not buy a Honda Marine motor for their Whaler.
Jefecinco posted 08-12-2014 09:35 AM ET (US)     Profile for Jefecinco  Send Email to Jefecinco     
Honda have had their share of problems. We don't hear about them as mush as other makes but their density is much lower than most others.

I'm not knocking Honda as I believe they, like Evinrude, Mercury, Suzuki, Yamaha and a couple of other smaller makers produce fine products.

The best part is, if you are analytical, determining which product is the best for your transom.

Butch

jimh posted 08-17-2014 06:33 AM ET (US)     Profile for jimh  Send Email to jimh     
As I requested in the initial post, some accurate data about the MSRP of another line of engines was sent to me. Many thanks for the contribution of this good data.

Here are some prices for Mercury VERADO engines. There are two series, a four-cylinder line, and then a six-cylinder line. The data is for 25-inch shaft.

MERCURY VERADO Four-cylinder

150-HP = $13,775 or $91.83/HP
175-HP = $14,910 or $85.20/HP
200-HP = $16,130 of $80.65/HP

MERCURY VERADO Six-cylinder
225-HP = $18,970 or $84.31/HP
250-HP = $19,745 or $78.98/HP
300-HP = $21,860 or $72.86/HP

INCREMENTAL HP

150-HP = $0 or base
175-HP = $1,135 for 25-HP or $45.40/HP
200-HP = $2,355 for 50-HP or $47.10/HP

225-HP = $0 or base
250-HP = $775 for 25-HP or $31.00/HP
300-HP = $2,890 for 75-HP or $38.53/HP

In this price structure, it makes little sense to buy a 225-HP. The 250-HP's extra 25-HP are very inexpensive, only $31-per-horsepower.

jimh posted 08-19-2014 10:19 PM ET (US)     Profile for jimh  Send Email to jimh     
ASIDE on the minutia of Evinrude G2 models: I believe the 300-HP E-TEC G2 engine with the RAVE valve will be called the E-TEC 300 RAVE. The term "RAVE" stands for Rotax Adjustable Variable Exhaust. The RAVE technology modifies the exhaust porting of the two-stroke engine. This technology has been used in snow machine engines to produce very high horsepower from relatively small displacement engines. I believe that the E-TEC G2 300 RAVE will be the first application of the technology to an outboard engine. Since there is a considerable addition to the mechanical complexity of the engine, the E-TEC G2 300 RAVE model will likely be more expensive than the standard E-TEC G2 300.
Jefecinco posted 08-20-2014 10:42 AM ET (US)     Profile for Jefecinco  Send Email to Jefecinco     
Do you expect the RAVE 300 engine will have less displacement and possibly weigh less than the standard 300?

Butch

jimh posted 08-20-2014 09:27 PM ET (US)     Profile for jimh  Send Email to jimh     
Butch--All of the E-TEC G2 engines have a totally new design for the engine block, cylinders, heads, ports, and so on. I expect the Evinrude E-TEC 300 RAVE will use all that design, and just add the Rotax Adjustable Exhaust Valve. But that is just complete speculation on my part.
jimh posted 08-20-2014 09:29 PM ET (US)     Profile for jimh  Send Email to jimh     
I have some other MSRP data about tier pricing by horsepower for outboard engine families in the Mercury lines, but it will take me a while to get it presented here. Can we have some data about Yamaha, Suzuki, or Honda?

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