Tough new government standards for fuel economy mean manufacturers must find ways to boost mileage while offering plenty of affordable full-size sedans and small SUVs. So, carmakers need to produce lighter vehicles without compromising safety. They need to tweak internal-combustion engines without losing the power that drivers love. And they have to persuade more consumers to switch to electrified vehicles.
A California law that large automakers must have zero-emissions options in their fleets has helped increase the number of fully electric vehicles. The Fiat 500e and Honda Fit EV join the ranks for the 2013 model year, and the Chevrolet Spark EV debuts this summer. But consumers haven’t embraced electrics the way automakers had hoped. High prices, range anxiety (the fear that the battery will die) and a lack of public charging stations are holding down demand. Even the $7,500 federal tax credit doesn’t seem to sway many potential buyers. If you’re in the market for an EV, you’ll likely find dealers willing to haggle.
Plug-in hybrids – gas-engine and electric-motor combos with a battery you can recharge at home – are a more palatable choice. The newest models get about 20 miles of electric range and then operate as traditional hybrids, using the electric motor to assist the gas engine and regenerative braking to recharge the battery. They offer better fuel economy than past hybrids: the equivalent of 100 miles per gallon in electric mode, and combined economy in the mid 40s in hybrid mode, without limited range.
Ford will offer two plug-in models in 2013: the Fusion Energi ($39,495) and the C-Max Energi ($33,745). The C-Max is available in 19 markets and will be sold in all 50 states by next year; the Fusion debuts soon. Honda is adding a plug-in model to the Accord lineup ($40,570), but initially it will be sold only in California and New York. All will qualify for tax credits based on their battery size. Ford plug-in buyers are eligible for a credit of $3,751, and Honda Accord buyers can get a credit of $3,334.
The C-Max plug-in is one of a new breed of small, energy-efficient wagons with seating for five and versatile cargo space. It also comes as a traditional hybrid ($25,995). The Prius v hybrid ($27,445) and Volkswagen Jetta SportWagen diesel ($26,335) are other models that offer an alternative to small crossovers.Jessica Anderson is an associate editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to email@example.com.