Will alternative auto power make sense in ’07?

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More than in any previous model year, 2007 will signal a time when consumers will have more choices regarding fuel efficiency in their new car than just selecting a four, six or eight-cylinder engine.

Will it be the year you buy a gas-electric hybrid car, one that will run on ethanol or perhaps a sedan with a diesel engine?

Not surprisingly, finding the vehicle that saves fuel and makes economic sense in the long run will require a buyer to do a lot of homework.

High gas prices have made fuel economy a major concern of many buyers, but tax-law changes, cost-trimming efforts by some businesses and other factors have created often confusing choices.

Are you considering a hybrid because of big tax breaks that go along with the purchase? While that’s true for some hybrid vehicles, others qualify for very modest tax breaks and not too far into the 2007 model year, the tax breaks for some of the most popular and fuel-efficient vehicles are likely to vanish.

What about those alternative fuel vehicles that have been the darlings of ads from General Motors, Ford and Chrysler? They can help us lessen our dependence on foreign oil, but buying a vehicle that runs on a mixture of 15 percent gasoline and 85 percent ethanol could disappoint.

And isn’t it about time American drivers got in line with other parts of the world to recognizing diesel power is more fuel-efficient than gasoline? Perhaps, but 2007 may not be the year that happens because of diesel emission concerns.

If this has you scratching your head, you’re probably not alone. To help you navigate the twists and turns of these alternatives to a gasoline-only vehicle, here’s a rundown on what you need to know.

Hybrid vehicles
Only if you’ve been living in a cave without TV, radio or newspapers could you possibly have escaped the barrage of stories about hybrid vehicles that were first introduced in the United States more than five years ago.

Essentially, a hybrid uses a small gasoline engine and a battery-powered electric motor to run the vehicle. When full power is needed, the gasoline and electric motors work together. When less power is required, such as sitting at a stoplight or cruising at 55 miles per hour on the freeway, the vehicle is likely to run only on the batteries. When you step on the brake, and in some other circumstances, the batteries are recharged, so a hybrid never has to be plugged in.

It is very cool technology, and the gas and electric systems mesh nearly seamlessly. For those concerned about reliability, most manufacturers offer longer-than-normal warranties on the drive system.

But what about the savings?

Even with a gallon of regular gas selling for $3, the most fuel-efficient hybrids — currently the Toyota Prius, at an EPA estimated 60 mpg highway and 51 mpg city — will not start saving a buyer from the first fill-up. The reason is that hybrids can cost from $2,500 to $4,000 or more above a comparably sized and powered gasoline vehicle.


The math goes something like this:

At a city/highway average fuel economy of 55 mpg (your actually mileage will certainly be less), it would cost you about $5,454 to drive 100,000 miles.

Computing fuel cost
100,000 miles / 55 miles per gallon = 1,818 gallons
1,818 gallons x $3 per gallon = $5,454 (5.5 cents per mile)

The most fuel-efficient automatic transmission Corolla, which is similar in size and power to a Prius, is rated at 30 mpg city and 38 mpg highway, with an average of 34 mpg (and, again, your mileage will almost certainly be less). It will cost about $8,823 to drive 100,000 miles.

Computing fuel cost
100,000 miles / 34 miles per gallon = 2,941 gallons
2,941 gallons x $3 per gallon = $8,823 (8.8 cents per mile)

So it will cost $3,368 less in gas to run the Prius for the first 100,000 miles. Next, a base Prius lists for $21,725. A Corolla LE lists for $16,115 — a difference of $5,610. So based on gas costs alone, at 100,000 miles a Prius costs $2,242 more to run for 100,000 miles.

Computing fuel cost
  Vehicle cost Fuel cost Total
Prius: $21,725 $5,454 $27,179
Corolla LE: $16,115 $8,823 $24,938
Difference: $2,241

But, you ask, what about those big tax breaks?

Here’s where it gets complicated and where quick action might save you thousands.

When Congress passed a comprehensive energy bill last summer, it allowed for one-time-only tax credit for buyers of hybrid vehicles, with the most fuel-efficient of the hybrids getting the largest break.

The Prius qualifies for a $3,150 tax credit, which would more than make up for the $2,241 higher operating expense over the first 100,000 miles.

But as with all things political, nothing is as simple as it should be. The tax credits, which went into effect Jan. 1, are skewed to helping the Detroit manufacturers, who have been late to the hybrid game.

The law says that after a manufacturer sells 60,000 hybrids, the tax break begins to go away. Toyota hit that mark earlier this year, so starting with cars delivered after Oct. 1, 2006, the tax credit will be cut in half. On April 1, 2007, the credit gets cut in half again and disappears entirely Oct. 1, 2007.

Honda buyers have a slightly longer window, since Honda hasn’t yet hit the 60,000 limit.

Buyers of hybrids from Ford, Chevrolet and Chrysler, which currently doesn’t offer a hybrid, can wait quite a while. As of June, only about 15,000 hybrids have come out of Detroit, most of them from Ford. The two-wheel-drive Ford Escape Hybrid qualifies for a $2,600 tax credit, the highest among the domestic vehicles.

Nongovernmental incentives
The potential tax benefits and credits for buying a hybrid don’t necessarily stop with the federal government. Depending on where you live and who you work for, you could reap added money that would make a hybrid more attractive.

Unless you live in the Midwest, you probably can’t find a station that sells E85. There are more than 168,000 gas stations in the United States, but only 720 sell Ethanol. In California, for example, there’s just one E85 station.
It’s not as efficient as gasoline. A gallon of E85 contains 20 percent to 30 percent less energy than a gallon of regular gasoline. That means a flex-fuel vehicle will get about 25 percent fewer miles to the gallon.
Even with a 50-cents-per-gallon federal tax subsidy, a gallon of E85 costs about as much as a gallon of regular gasoline and can sometimes cost more, depending on your location.

Diesel vehicles
In some other countries as many as 60 percent of all vehicles have diesel engines — they get better fuel mileage and last longer. Getting 200,000 miles or more from a diesel engine is not unusual.

But diesels as power plants for passenger cars and even sport utility vehicles have never really caught on in the U.S., where only about 3 percent of all vehicles are diesels. Why?

Why 3 percent of all vehicles are diesels:
Ultra-strict emission standards keep most diesels from being sold in California and the Northeast.
Disastrous passenger car diesels General Motors sold in the 1980s led consumers to think diesels were slow and noisy, which certainly doesn’t describe engines available from Volkswagen and Mercedes-Benz, the traditional purveyors of diesels in this country.
Diesel fuel often is priced above regular gasoline, though the difference is usually more than covered by the 30 percent to 40 percent better fuel economy some diesels offer.

With gasoline flirting with $3 per gallon, it would seem that 2007 would be the time for diesels to shine.

Unfortunately — at least at the start of the 2007 model year — that’s not the case, thanks to new nationwide EPA regulations taking effect Jan. 1 that will require emissions of diesel-powered passenger vehicle to meet the same stringent levels as gasoline vehicles.

Jeep, which took a tentative step into the diesel pool with its 2006 Liberty, ceased production of the diesel model in May because it couldn’t meet the pending new standards. Volkswagen, the largest seller of diesels cars in the United States, won’t offer diesels in its Golf, New Beetle and Passat models in 2007.

Still, most everyone is scrambling to develop new, more environmentally friendly diesels.

General Motors is revising its diesel engines and, as of now, won’t offer a diesel engine in its SUVs for the start of the 2007 model year. Ford plans a new diesel for its SuperDuty pickup as a 2008 model.

That doesn’t mean there won’t be any diesels available in 2007.

Volkswagen will offer a revamped diesel engine in a limited number of its 2007 Touareg and Jetta models.

Mercedes-Benz promises a new diesel in its E-Class sedan that will meet the Jan. 1 standards, and Chrysler will also make use of that engine, offering for the first time a diesel version of its Grand Cherokee SUV.

So for now, it looks like fans of the diesel will have to wait until the 2008 model year before the choice of vehicles expands significantly.

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