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Getting More for Your Gallon

by Andy Kroll

The Chevy Volt: the great hope for the future—and viability—of General Motors. Photo courtesy of General Motors.

Last summer’s record spike in oil prices, which shot gas prices up to $4 a gallon or more, may have subsided for now, but the memory of painful prices at the pump still resonates with consumers and automakers.

Add to that the rising tide of legislators, policymakers and environmentalists calling for cleaner cars on the road, and the result is the one of the largest pushes for increased fuel efficiency in U.S. history.

The gas-guzzling SUVs and trucks that once ruled the road during the era of cheap gas are now looked at with derision. In their place are smaller, more efficient compacts and mid-size vehicles like the Chevy Cobalt, Ford Focus, Honda Civic and Toyota Corolla.

Emerging technologies like hybrid engines, combining electric power with combustion engines, advance fuel efficiency technologies even further, as seen in Toyota’s Prius (the “icon of green automobiles,” according to U.S. News and World Report), or Ford’s upcoming Fusion Hybrid model.

At the federal government level, vastly improved fuel efficiency is a priority, as seen in legislation passed by Congress in 2007 mandating that fuel efficiency for cars and trucks meet or exceed 35 mpg by 2020.

On Friday, the Department of Transportation announced that the combined fuel efficiency of 2011 model cars and trucks must be 27.3 mpg, a 2 mpg jump from the existing standard.

“These standards are important steps in the nation’s quest to achieve energy independence and bring more fuel efficient vehicles to American families,” transportation secretary Ray LaHood said in a statement.

The 2011 fuel economy standards, an early step toward that 2020 goal, mandate that cars get an average of 30.2 mpg and light trucks—including SUVs, pick-up trucks and vans—get, on average, 24.1 mpg.

But can automakers keep up with federal fuel economy mandates? Will the technologies needed to achieve a 35 mpg industry standard be in place for 2011 models?

So far, international car companies seem to have lead the way in recent decades in improved in fuel economy.

The 2009 Honda Civic, one of the highest rated cars among foreign and domestic automakers. Photo courtesy of Honda Motor Company.

Smaller cars like the Toyota Corolla and Honda Civic consistently lead all of the auto industry in getting the most miles for each gallon, earning 30 mpg and 29 mpg, respectively. (The 2009 Honda Civic Hybrid gets an impressive 42 mpg, but costs around $27,000.) These cars are priced at reasonable levels as well: A 2009 Honda Civic base model costs $15,505, and a 2009 Toyota Corolla base model starts at $15,350.

And, of course, there’s the Toyota Prius, the established leader in hybrid cars whose 2009 model gets 46 mpg, which has lead the way in alternative automotive technologies since landing on showroom floors in 2004, despite its slightly higher price. A 2009 Prius base model costs $23,375.

On the domestic front, despite the existential questions surrounding Chrysler and General Motors, both companies and the slightly more well-off Ford Motor Company have shifted away from larger, more expensive pick-ups and SUVs toward smaller, more fuel efficient cars like the Chevy Cobalt (30 mpg, around $15,000) and the more compact Ford Fiesta compact.

A row of new Ford Fiestas at the Port of Baltimore on March 26. Photo courtesy of Ford Motor Company.

U.S. automakers haven’t enjoyed the same success as the foreign companies when it comes to more fuel efficient vehicles, but hope ambitious investments in battery-powered cars could help them elbow in on the emerging alternative technologies market—and, in the case of General Motors, prevent the company from complete collapse.

Much has been made of the Chevy Volt, a battery-powered, plug-in vehicle that would get 40 miles on a single battery charge and have an estimated range of 640 miles using the battery and gasoline-powered engine. The New York Times called the Volt “G.M.’s Latest Great Green Hope.”

Indeed, much of GM’s future success is pinned on the success of the Volt, the much anticipated new breeds of cars powered by a cutting-edge lithium ion battery that is slated to hit showrooms in late next year.

The major downside with the Volt is its estimated cost—upwards of $40,000 at first, which could turn off buyers despite the longer-term savings of less gas consumption.

“If you’re the affluent individual who wants to make a statement, it’s one thing,” Ron Pinelli, president of MotorIntelligence.com, an industry analysis firm, told The Times. “If you’re Joe the Commuter, you’re not going to spend $40,000 on an electric car. It’s insane.”

Martin Zimmerman, a University of Michigan professor and auto industry, did not respond to multiple requests for comment on the viability and potential success of the Volt, and on the future of fuel economy in the U.S.

In the next four years, Ford also plans to unveil a battery-powered electric small car and commercial van by 2011 and 2010, respectively, and a plug-in hybrid vehicle as well by 2012.

But no matter how impressive vehicles with alternative energy technologies are, the chances that they’ll catch on among Americans is slim until they come down in price. While it’s true the savings in gas expenditures over the life of car will make up for the initial price, consumers will almost always balk at a sticker price in the range of $25,000 to $40,000.

In short, like all green technologies and products, affordability is crucial to success.

Fortunately, until the Chevy Volts and Honda Civic Hybrics come down in cost, there are affordable options with high fuel economy using existing technologies. And with the federal government nudging automakers toward better fuel efficiency, the country appears to be on the right track toward a more efficient, environmentally friendly auto industry.

But with the urgency surrounding the need to curb greenhouse gas emissions growing by the day, the question remains: Will fuel economy efforts by automakers and the government be too little too late?