An Increasing Priority: Fuel-Efficient Automobiles

It’s been roughly nine months since I addressed the subject of alternative automobile fuels and fuel-efficient automotive technologies. I last wrote on the topic in these two stories late last summer:

Since then, average U.S. gasoline prices have risen from $2.74 per gallon to $3.88 per gallon (source: GasBuddy.com). In recent weeks, the average U.S. retail price of diesel has also risen dramatically (Source: U.S. Energy Information Administration); it’s currently up $4.49 per gallon. When I wrote very favorably about Clean Diesel last year, diesel prices were in something of a free fall and were almost $2.00 less per gallon on average than they are today.

So, the cost of transportation has increased markedly since last September. I believe the U.S. has been in a recession driven by a loss of consumer confidence since January. The two main causes of that loss are the large slump in housing prices (which, in turn, was caused largely by the sub-prime fiasco) and the precipitous rise in world oil prices. Inflation is a serious problem in the U.S. and elsewhere. The rise of diesel prices is having an increasing effect on the price of goods, which in the wide open spaces of the U.S. is heavily dependent on diesel-powered transportation for distribution.

Put simply, as China and other nations increase their industrialization and standards of living, the demand for oil is increasing steadily. On that last point, so long as we don’t head into a sharp global recession, the likelihood is that demand will continue to rise, perhaps significantly. I hate to be gloomy — I’m generally an optimistic person, especially about business issues — but the signs are not looking good. You don’t need to be an economist to know that the economic situation is heading south.

Cars in the Real World

So what does that mean to you and me in our workaday lives where transportation costs are mounting up?

It may be a transitional technology, but hybrid-electric vehicles are the best bet in the U.S. right now and for the foreseeable future. It’s true that diesel engines derive power more efficiently than gasoline engines, and I’m a staunch backer of the Clean Diesel initiative. But at $4.50 a gallon, diesel-powered cars no longer make much sense for the typical U.S. consumer.

Toyota is the clear technology leader in hybrid-electric-vehicle technology. If you’re in the market for a new car, I recommend checking out two lists provided by Consumer Reports:

[Note: Consumer Reports puts some of its content behind a subscriber firewall, and that could happen to these pages, but right now they're in the clear.]

The large downside to the Consumer Reports lists is that they don’t include all hybrid vehicles, only those in two categories that the magazine has tested. Noticeably absent, for example, is the Ford Escape Hybrid and Mercury Mariner Hybrid. For another list of automobiles in the U.S. listed by EPA fuel economy figures, see FuelEconomy.gov. Even though the EPA estimated fuel-economy numbers have become much more realistic beginning with 2008 new vehicles, I find that Consumer Reports‘ numbers (which are sometimes higher and sometimes lower than the EPA estimates) are more realistic.

Some of the vehicles on the Consumer Reports lists are not hybrids, they’re just fuel-efficient gasoline vehicles. If your budget won’t allow for, or your needs don’t justify a more expensive hybrid, very small cars like the Toyota Yaris and Honda Fit make a lot of sense. These vehicles give you about 25 mpg around town and about 40 mpg on the highway (according to Consumer Reports).

Most of us spend most of our time driving city, suburban, or country roads — not cruising at fuel-efficient highway speeds. That’s one of the big reasons why hybrids are so attractive; most of their added fuel economy is delivered around town at slower speeds and when frequent stops are a part of the driving scenario.

In the U.S., the most fuel-efficient hybrid is Toyota’s Prius, the only vehicle in this market designed from the ground up to be hybrid electric. CR rates this vehicle at 35 mpg city and 50 mpg on the highway. Because the more expensive Prius Touring model has shorter stopping distances and slightly better handling, Consumer Reports has recommended this model above the Prius base model. The prices on the Touring model range from about $25,000 to $28,500 in the configurations that it’s typically available (at least, in the northeastern U.S.).

One of the reasons I’m attracted to the Prius is the fifth door. It may be an ugly duckling without much power, but unlike most other hybrid cars, the Prius’s hatchback design gives it very good cargo capacity. The Toyota Camry Hybrid has a bigger back seat but a pocket-size trunk. With two kids, the Prius is more practical for my needs. The biggest single problem with the Prius may be finding one on dealer lots. It’s so popular that no dealers in my area have it in stock. People are paying full price for it without even test driving it and then waiting weeks or months to take delivery.

But what if you don’t have kids or large pets (or you have another kid-hauling vehicle) and your primary concerns are fuel economy and vehicle price? I’ve got the answer for you: Honda Civic Hybrid. Honda uses a smaller 1.3-liter, 8-valve 4-cylinder gas engine coupled with a much smaller electric motor mounted between the engine and transmission. Honda’s design is ingeniously simple and lightweight. Although its fuel economy is less than that of the Prius (26 mpg city and 47 mpg highway) and it has a tiny trunk, it’s also a much better looking car and less expensive — about $23,000 (without satellite-linked navigation). Note, though, that small electric motor doesn’t deliver the mpg savings as well as the Toyota Prius.

The two main choices in a larger sedan are the Toyota Camry Hybrid and the Nissan Altima Hybrid. The chief advantage of the Altima is that you may still be able to get the $2,350 federal tax deduction. There’s information about that on this Nissan page (wait for the flash page to finish drawing, then click the “tax credit” link in the lower right corner).

The chief downside of the Altima is that Nissan is only selling it in California, New York, New Jersey, Connecticut, Massachusetts, Vermont, Maine, and Rhode Island. Even if you happen to live in one of those eight states, Nissan apparently isn’t training its entire dealer network on how to service the hybrid components, which is not a good situation for those who might drive to Canada, Mexico, Alaska, or any of the rest of the 40 continental states. To a lesser degree, this sort of problem applies to all hybrid vehicles. Even though Toyota supports its hybrids throughout the U.S. and beyond, for many types of repairs you’re better off going to Toyota exclusively for engine and transmission repairs, and some maintenance too. That’s especially true of the Prius.

According to Consumer Reports, the Altima Hybrid gets 27 mpg city and 36 mpg highway. The Toyota Camry Hybrid is a similar vehicle designed around very similar hybrid technology (it appears that Nissan may get its hybrid technology from Toyota). The Camry Hybrid is a bit more fuel efficient, grabbing CR fuel-economy ratings of 28 mpg city and 41 mpg highway. The Nissan Altima Hybrid’s gas engine is less optimized for fuel economy than the Toyota engine. The Altima Hybrid is nearly a second quicker to 60 miles per hour, and it stops in 10 fewer feet than the Camry Hybrid. In most dimensions, the two vehicles are nearly identical, including wheel base, width, height, length, and turning circle. The Altima is 125 pounds lighter. The Camry’s cabin size is slightly larger, though.

When I configure them online, the Altima and Camry hybrids come out to about $30,000. But these models may be hard to find. When I search dealer inventories in my area, the prices are higher because they have added options.

For those who would prefer to buy a hybrid from a U.S. company, Ford is working on a redesign for the Ford Fusion (and Mercury Milan) that will include a hybrid variation. It’s unclear whether this will be a mildly updated version of the hybrid technology used in the Ford Escape and Mercury Mariner SUVs, or whether it represents an all new second generation hybrid technology from Ford. A video on the Ford website touts the performance advantages of forthcoming “EcoBoost” engines coming in 2009 with “V8-like power” and “V6-like fuel economy.” The video shows the Fusion in several spots. If EcoBoost is the next generation, it might not offer high miles per gallon. Pricing on the forthcoming Fusion Hybrid hasn’t been released.

If you want a larger hybrid, such as a cross-over SUV, your options are greatly limited. The vehicle my wife and I bought, the 2007 Toyota Highlander Hybrid, was expensive. It’s easy to drive, extremely well designed to maximize people space and cargo area, and the hybrid technology has been delivering an average 28 to 31 mpg in all types of driving.

But there’s a problem. Beginning with the 2008 model year, the Highlander Hybrid was redesigned. It’s bigger, has curvier lines, and lots of modest updates. But the base model with a mid-range package of add-ons (stuff I’m deeming that most people want) starts at $40,000. When I configure the 2008 Highlander Hybrid as close to the way my wife and I bought the 2007 model (without DVD nav and DVD entertainment), Toyota wants a whopping $45,000 for the Camry-derivative cross-over hybrid. The Highlander Hybrid is no longer that great a value. A few phone calls and a trip to a few dealers in my area informed me that Toyota is having no trouble selling its more expensive Highlander Hybrid, either. So they’re very hard to find. I credit the precipitous rise in gas prices for that.

The 2008 Ford Escape (gas only) didn’t fare well in CR’s tests. It got dinged for poor brakes (something I can’t abide), poor acceleration, fit and finish issues, and low owner satisfaction. The one area that the Ford Escape excels is price. Tricked out with about 75% of the options (not the expensive DVD navigation package, though), the Ford Escape Hybrid is about $31,000. The Escape design is dated and due for a major upgrade. This vehicle might well be worth a close look when Ford gets around to its next major redesign.

Fuel-efficient vehicles designed for the people-mover role are few and far between, and you pay dearly for them. The best gasoline-powered minivans get only about 20 mpg in mixed driving, and I’m not aware of any hybrid vehicle in that class.

The Hybrid Downside No One Talks About

Having owned a hybrid-electric vehicle for the better part of a year, there’s one downside to the technology that I haven’t read about anywhere. When the central New England winter months rolled in, the gas-mileage efficiency went down. You need heat in the cabin and battery bank doesn’t hold its charge as well in the cold; both of those conditions require the gasoline engine to run more frequently. It may be more obvious in a marginally effective hybrid like our mid-size SUV. But bottom line, our average gas mileage plummeted to 24-25 mpg from December to March. It’s something the dealer won’t tell you.

Nevertheless, with crude oil prices over $130 per barrel, I’m giving strong consideration to buying a second, far more efficient hybrid vehicle. Since giving up my 1995 Nissan to my 16-year-old in December, my daily driver is a four-year-old Toyota Tundra pickup that I bought during the eight-year period when I worked out of my home. Even though I have a short commute, it’s time to either put the pickup in low-cost storage or sell it to someone who has an actual reason to drive one.

In case you hadn’t gathered, I’m strongly leaning toward a Prius. It’s possible to buy a stripped-down 2008 model for as little as $23,500. I lived through the first gas crisis in 1973 and I worked as a very young gas-station attendant during the gas panic of 1979. It probably won’t be as bad as the first oil crisis, but it’s at least possible that we could be heading for something like that. The time to prepare for such an event is before it happens.

I don’t mean to be alarmist (though some of you will probably take it that way), but people should be considering moving closer to their jobs, checking out their public transportation options, carpooling, finding nearby shopping, selecting daycare that isn’t on the other side of town, and so on. The cost of transportation has become a bigger part of your overall expenses already. Managing that cost is important for all of us — especially if inflation of other goods continues to rise. It’s much harder to moderate consumption of items like food, childcare, clothing, shelter, and staple goods.

I’m very interested in your experiences, insights, knowledge, and opinions about the best strategies for dealing with the rising prices of oil, gasoline, and diesel fuel with respect to our homes and vehicles. I’m also interested in knowledgeable insights from people educated in the fields related to automotive technologies that might be used in the future. For example, research and talk about plug-in hybrid electric vehicles is all the rage, but as near as I can tell we’re going to need some significant breakthroughs before that’s going to be viable. Besides, if your electric bill is anything like mine, I’m not sure how much advantage that’s going to be. What’s the truth? Please post comments or send me email.

10 Responses to “An Increasing Priority: Fuel-Efficient Automobiles”

  1. dartiss Says:

    Well, expensive fuel is something we’ve had in the UK for a long time due to a high tax on it.

    There are hybrid cars, yes, but the weight of the batteries often compensates for any fuel efficiency gains you get. A Prius, yes, is hybrid but there are non-hybrid cars available which have a better fuel efficiency.

    The easiest solution is to be realistic. What size do you really need? Do you need a big SUV? I have a family but a small car with a 1.2 litre engine in it works for me – everyone can fit in it and it goes from A to B. But that’s not unusual in the UK. You can then spend the extra money or lots of luxuries. But the best thing is that it’s fuel efficient. I can get 39-49 mpg out of it.

    The other thing we can all do is simply to drive better. I can get the better fuel economy in my car by simply driving in a different style – reduce rapid acceleration and braking and you’ll see miles being added to your mpg. More details here… http://www.fueleconomy.gov/feg/driveHabits.shtml

  2. Scot Says:

    Dartiss:

    I get these types of comments routinely from my European readers whenever I do stories on this subject. In the U.S., there are NOT cars with higher gas mileage available on the market. At one time there were, but there aren’t now. I think we can expect to see them in future, although, I doubt we’re going to see conventional gas engine vehicles here with better-than-Prius gas mileage any time soon.

    Your comments also imply you didn’t really read or fully take in what I wrote. I mentioned the Yaris and Fit before I talked about any hybrids. These diminutive gas only vehicles along with the Smart Car are the closest thing to the bevy of very small vehicles widely available in most European countries. Those cars just don’t sell well in the U.S.

    I would also point out that points A and B in the UK and some other parts of Europe may be a lot closer together than they are in the U.S.

    Simply driving better sounds really good, and I don’t disagree with the notion. But drive a mile over here. The people who drive slowly here endanger everyone around them as well as themselves. It’s not a person-by-person solution. It’s a social phenomenon we have to address in the U.S. We have huge cities in the U.S. that don’t have any mass transportation, or that have all but useless public transportation. The rising prices are probably the only kind of motivator that will work.

    Hybrid vehicles also give you visual feedback that helps remind you to drive with more awareness of your momentum and better anticipation of the road conditions ahead.

    I realize that the U.S. is the only large market in the world where hybrid vehicles are taking off. But they are working here and they’re going to become very, very prevalent in the U.S. if the price of oil doesn’t come down. To each market its own.

    Finally, I agree with you that hybrid technology isn’t a long-term solution with today’s technology. Toyota, for example, had planned to use a much lighter electric motor for its third-gen hybrid system (originally scheduled for release next year in the U.S.). It also planned to use lighter lithium-ion batteries before it became clear that battery heat and safety issues wouldn’t be acceptable in the U.S. marketplace. If hybrid-electric vehicles have a long-term future, battery technology must have a breakthrough. Until that happens, HEV is merely a transitional solution on the way to whatever we’re eventually going to adopt.

    I would caution you, though, not to view everything through your own prism either. The high taxes, relative small geographical area, and the topography of the UK have a strong effect on the conventional wisdom. Certain technologies may be better for your environment that don’t necessarily translate to what other parts of the world need. What’s clear is that there’s no obvious solution to the problem. We’re using partial workarounds and step technologies. If a revolutionary technology appears, it will likely transform all markets. We’re just not there yet.

    My point is: Until we see that advent, I believe it’s very hard to generalize. That’s why you’ll notice a lot of references to “the U.S.” in my piece. Most of what I write translates pretty well to the world (I hope). I’m quite sure this one doesn’t.

    I do welcome all points of view though, and I think U.S. readers will benefit from input from people who live in other parts of the world.

    — Scot

  3. algrinch Says:

    I drive a Honda Civic (not the hybrid). To me it is the best balance between purchase price, interior space and mileage. Now with that said I drive mostly on the highway and wouldn’t realize much advantage from a hybrid.

    There is something to be said for easing off on the gas pedal. A few months ago, I started accelerating more slowly and driving at the speed limit. I noticed an increase in gas mileage. If the faster drivers don’t like, well too bad. In my youth driving fast made me a rebel. Now at 39 driving slow makes me one.

    I think it is great that people are starting to think about these issues.

    By the way I changed to fluorescent light bulbs, got rid of two old appliances, and eased off on the air conditioning. I saved 30% on my electric bill.

    Go Green.
    Al

  4. Scot Says:

    Al, if more people thought the way you do, we’d be in much better shape. I agree with all your points. I also think that the Honda Civic is a great vehicle. (What’s more, Honda is about to go nuts with hybrids too.) But wouldn’t it be great if Honda, Toyota, Nissan and others offered the smaller-engines in the U.S. that they sell in many other parts of the world? I think it will happen. But there’s a certain segment of the U.S. marketplace that will always want more torque and hp.

    By the way, one thing you said that isn’t really true is that hybrids only do well around town. One of the somewhat surprising things about Consumer Reports’ gas-economy testing is that smaller hybrids also do better on the highway than around town. Check out those two bulleted Consumer Reports links in this blog posting.

  5. dartiss Says:

    Hi Scot,

    Well, yes, I was reading your article. But I particularly homed in on the hybrid solution because that’s seen as a “trendy” solution these days. More fuel efficient cars aren’t yet with us. Of course, that would be nice, but I don’t think there’s much more we can with current fuels.

    Equally, I could accuse you of not reading my reply as my solution for better driving was not to cut your speed but to change the way you drive. I was talking about 39-49 mph and the speed limit on most roads in the UK is 70mph – which I believe is a lot greater than many in the US. Imagine the economy of driving at US speeds?

    But, yes, I’ll admit if I was making a long distance drive across the US I wouldn’t use my particular car. But that’s just the particular make – there are plenty of high quality, reliable small cars which could make that kind of journey as well as anything you currently have. Of course, as you state, the problem is availability – lobbying car companies for this kind of thing whilst awaiting some future fuel solution is surely the only way to go for the time being. Except, changing driving habits ;-)

  6. Scot Says:

    No, the way to go in the U.S. is with a hybrid. Don’t knock it until you try it. I own one, and I love it.

  7. algrinch Says:

    Scot,

    I agree the hybrids gets better gas mileage on the highway than my civic. The problem for me is its not enough better on the highway to justify the increased purchase price. If the price of the hybrid came down I would be first in line.

    I like the Smart car. I just wish they would sell them in Canada with the diesel motor that is offered in Europe. Canada now sells low sulfur diesel so their shouldn’t be any problem.

    I also completely agree there is not enough choice in the small car area. Where is the 100 mpg econobox? My civic gets 50 mpg gallon (imperial gallon), but then again so did my 1981 Toyota Tercel (well maybe not 50 mpg, but close).

    The car manufacturers have improved technology in their gasoline engines, but instead of making cars that get better mileage they make bigger cars that get the same mileage.

    There is also an interesting car manufactured in Quebec. The problem for me is it doesn’t go fast enough, not even for in town. Otherwise I like it.
    http://www.zenncars.com/

    Al

  8. PhilG Says:

    I have a V6 Impala. I get about 23 mpg overall. I use about 12 gallons a week. At $2.00 – approx when I bought the car – it cost $1248 a year in gas. At $4.00 I will pay an additional $1248 a year. That is less money than I will pay for my next HD TV. That is less money than I pay for my family’s cell phones. It happens to be equal to what I pay for cable plus cable internet access. My point is that there is no cost justification to replace the car before it reaches end of life. I hope that there will be good alternatives available by the time I need to replace it. But who knows. Gas might be back to $2.00 a gallon by then. It’s happened before, which IMO is why we wound up with huge SUV’s in the 1990’s instead of continued improvements in fuel economy ala the 1980’s.

  9. Scot Says:

    Phil, I agree that it would be foolhardy to dump a car well before you’re ready to purely for gas-economy reasons — especially when you use only 12 gallons a week. I’m not suggesting that everyone rush right out and buy a hybrid.

    This is why I specifically talked about my V8 pickup truck, which I had never intended to use as a commuting vehicle.

    I was already in the market, but not rushing, for a new car with which to make the trek to work. I was considering used vehicles, perhaps even something fun to drive. But that usu. means premium gas (recommended, anyway), and the longer I thought about it the higher the gas prices got. I reached the point where it just made sense to begin thinking hybrid. If you’re in the market right now, it’s hard not to at least consider something more economical on gas.

    23 mpg is pretty respectable for a V6, by the way. GM does an excellent job on the fuel economy of larger engines — it’s one of their cornerstones.

    — Scot

  10. hkspike Says:

    Some interesting thoughts. Finally the emerging world’s various Governments are beginning to realise that state sponsored fuel is both expensive for Govt and skews the market for the end user. The price of fuel may actually ease as users in less well developed markets are shown a more realistic cost of their use of fuel. No doubt some US car builders are showing slow signs of a need to build more efficient cars but more critically for the world, is that the aspiring middle classes of the developing world who see car ownership as a badge of success have access to hi-tech machines as soon as poss rather than wait for the technology to trickle down over a few decades as the West moves on. A brief visit to Bangkok and Beijing will quickly illustrate the issue and that many new efficient cars still produce a lot of dirt. Equally asking them to build power stations to charge car batteries just changes the pollution source. Rather than politicians engaging in pork belly politics to provide ethanol from corn to enrich a few, we need seed money in a large number of possible future technologies.

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