My Top 10 High-MPG Cars of 2013

My Top 10 High-MPG Cars of 2013

My Year of Driving the Latest Electric, Gasoline and Diesel Technology Cars.

silicon valley,advanced car,tech car,future car

At Silicon Valley Reinvents the Automobile

What a year! No one should doubt that 2013 was a breakthrough year for advanced technology vehicles, whether running on electricity, gasoline, diesel or some combination of the three.  The choices expanded, prices dropped and infrastructure exploded (for plug-ins). This year presents an abundance of riches; as I wrote earlier, we (at least we in California) now have 10 pure electric vehicles to choose from–and 2014 promises and expanded roster of choices. I had the opportunity this year to sample more than half of those available. Add in plug-in hybrids and the list of EV choices almost doubles, while traditional hybrids, clean diesels and high-MPG gasoline vehicles ranks keep growing both in number and popularity.

This year I also had the opportunity to help organize two glimpses at the automotive future — the Western Automotive Journalists’ “Silicon Valley Reinvents the Automobile” and “Future Cars-Future Technology” events. Those programs whetted my appetite for what is coming soon and alerted me to much that is already making its way into our cars and advancing their efficiency.

I didn’t get into every vehicle available this year, so this comes from a limited sample that focuses on the new vehicles. My biggest takeaway from 2013–the toughest job for a new car purchaser is sorting out what vehicle or vehicles can deliver the best for his/her situation. It’s never a matter of pure MPG (or MPGe for the plug-ins), but the type of vehicles that functions for you.

Here are the highlights of the year from my drives with some notes about how the vehicles fit into the many lifestyles out there. The choices are amazing and have been getting better every year. I’m really looking forward to 2014!

Also, I have to add a few more to the Top 10 in a couple categories just because so much has happened this year.

1. 2014 BMW i3 – both EV and range-extended EV.  I had the opportunity this year to help out BMW on a project introducing the new 2014 i3 to some folks just after its official “launch” and managed to spend several days squiring around three versions of the lead vehicle in the company’s new “i” division. With this car, available as a pure electric and also with a range-extending motor, BMW follows its Mini-E and Active-E programs with “the real thing.” This car has so much going for it, from a carbon fiber monocoque to a plethora of environmentally friendly features to a price that makes it one of the more affordable BMWs, it’s hard to step back and analyze it.

In my time in the preproduction i3, the reactions to it were almost universally positive. Some skeptics questioned its unique

BMW,i3,electric car,i brand

BMW introduces the i3

styling, but that appears to be one the points BMW is making. When you see an i3, you won’t mistake it for any other BMW – or any other car on the road. Though small, it’s highly functional, with decent room for four adults (with rear seat access through a hidden rear half-door) and cargo space via the rear hatch. The lightweight car has ample power from its 125 kW electric motor and carried 22 kWh of liquid-cooled lithium-ion batteries underneath its floor panels. Range is expected to be somewhere south of 100 miles and its EPA (MPGe) will probably slot it right in the pack of current similar-size electric cars. With its small range-extender engine and 9-liter gas tank, the i3 will cost a little more but still only deliver about 180 miles or range, keeping the i3 as primarily an urban vehicle.

BMW’s approach with the i3 is to present a unique vehicle, a la the Toyota Prius, that is identifiable not only as an BMW and an EV, but one that the company hopes will become the icon of electrics. If that happens, it will displace the Nissan Leaf and Chevy Volt, who, along with the less common Tesla Model S, currently hold that mantle. Early orders from dealers (it will be available nationwide before midyear 2014) have BMW execs excited that they may have a hit on their hands. Tracking the rollout of the i3 during 2014 is one of the stories we’re looking forward to for this coming year. Our experience up to this point indicates that the i3 will delight purchasers the same way the Mini-E and Active-E have. In fact, we predict the i3 will let BMW put its mark on the EV world very quickly.

2. 2013 Ford Fusion Energi – a versatile, stunning cruiser.  Spending a week with the 2013 Ford Fusion Energi, the plug-in version of Ford’s best-selling midsize sedan, was eye-opening.  After driving small  EVs, the Fusion seemed and was a spacious vehicle.  A midsize sedan, it could handle five passengers in comfort, or in my use scenario, three adults and luggage for a 600-mile weekend roundtrip. With the battery taking up a portion of the trunk, space was at a premium, but the Fusion handled it all with aplomb.  Most enjoyable of all, it didn’t miss a beat on the open highway, delivering a great, comfortable ride balanced with good road feel and handling. Fuel economy was not the 100 MPGe you get plugging it in for local drives, but solidly above 40 MPG on the highway and combined.

The 2-liter Atkinson-cycle gas engine was fine around town and on the highway at speed, but strained on steep hills. The test model came loaded with all the latest technology, including optional active park assist,

adaptive cruise control, rear view video camera and driver assist package with lane keeping and cross traffic alert. With all this technology and a 17-mile all-electric range, the Fusion Energi is the harbinger of future automated cars. It’s standard technology is designed to aid the driver in his/her quest to obtain the best fuel economy. The system teaches you quickly how to brake to maximize captured energy, extending the EV-only range and increasing efficiency.

All in all, the $39,495 (including $795 destination charge) Fusion Energi is full of style and substance. According to EPA

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Ford has a plug-in version of its best-selling Fusion sedan

calculations, this model will save you $6,850 in fuel costs over five years compared to the average midsize sedan. Of course, if you have a short commute and can plug in at home and work, you can extend the electric range and increase those savings. As it is, Ford’s 2014 pricing has the Energi model starting $8,470 more than the Hybrid model, which in turn is $4,300 more than the standard Fusion. Some quick addition and you can see the Energi models costs almost $13,000 more than the base Fusion. While it may have a higher level of standard equipment, it’s clear that five years of “normal” driving are not going to recoup the additional cost. However, you also can factor in cash incentives in some states and a federal tax credit. In addition, because of its EV-capability the Energi is eligible for solo HOV-lane access in California, which offers a value for commuters that is sometimes hard to measure in dollars.

Fiat’s fun 500e

3. 2013 Fiat 500e – spunky gas-free fun. I gave this little electric car two thumbs up when I drove it earlier in the year. It remains the most fun EV I’ve driven and, while not the most practical car because of its small size (and miniscule back seat), it delivers so much in power and handling that it should be on the shopping list of anyone looking at electric cars. The best news is that, while eligible for all of the EV incentives and perks, the Fiat has a retail lease for the same price as its gas cousins.

4. 2013 Toyota RAV4 EVthe only SUV EV. This would seem like a no-brainer. Take Toyota’s bulletproof reputation for quality and hybrid leadership, add in some Tesla EV powertrain magic and drop it into a proven model (one that even has an EV heritage). The 2013 Toyota RAV4 EV has all that and its only limitations appear to be a high sticker price ($49,800 for the 2014 model) and limited availability (Toyota plans to build only a few thousand RAV4 EVs to meet its obligation under the California ZEV Mandate).

With a 100-mile range from its 115 kW electric motor and 845 pounds of battery (with a 35 kWh capacity), the RAV4 EV delivers the typical quiet, smooth and powerful electric vehicle experience. The preproduction prototype I drove was well put together. The model offers the high driving position of an SUV and all of the SUV functionality as the battery doesn’t intrude into the cargo area. Charging on anything less than a 30 amp, 240-volt charger is tedious, though, taking 12-15 hours on a 16-amp station and almost two days using a 120 volt wall plug. Toyota does

encourage installation of a home charger and works with Leviton as their preferred provider, offering reasonable prices for the chargers and installation.

My only issue with the RAV4 EV is one I’ve found on several Toyotas I’ve driven–it doesn’t seem to have much personality. It’s

Toyota,RAV4 EV,electric car,SUV

RAV4 EV assumes the position

functional, does everything asked and performs as well as much of its competition, but the steering and road handling lack the input I’ve come to expect from the best models coming from Europe, America and Asia. Unlike the Fiat 500e or some of the other models on this list, the RAV4 EV doesn’t leave a memorable driving experience. But what it has going for it is that it’s the only pure electric SUV available, offering the same 70 cubic feet of cargo space (behind the front seats) as the gasoline version. Of course, it’s front-wheel drive only, but then again it’s not likely you’re going to take a 100-mile range vehicle too far into the outback.

5. 2014 Jeep Cherokee – taking Jeep into new territory in looks and efficiency.  Jeep hasn’t made its reputation on styling and fuel economy. It’s know for outstanding off-road ability wrapped in a traditional-looking package and a variety of comfort features that have made it more and more car-like over the years.

The new Cherokee, which I took on a brief test drive, is an impressive step forward. As someone who spent more than half a decade at a magazine dedicated to Jeeps and 4x4s, I witnessed the introduction of the midsize XJ Cherokee in the 1980s, a revolution for Jeep that brought unibody construction to an off-road vehicle and started the movement to upgraded interiors in SUVs.

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Jeep’s new Cherokee is a looker that can perform

The old Cherokee was surpassed by the Ford Explorer and a variety of other SUVs that expanded the category to become essentially beefed up station wagons, some of which would potentially go off-road. The new Cherokee is a gauntlet tossed down by the new Chrysler/Fiat management, challenging this category once again to find a balance between style, rock-crawling capability and adding in fuel efficiency.

Pricing on the Cherokee appears to be as attractive as the stylish exterior, starting at $22,995 for a front-wheel drive version and ranging up to $29,995 for a 4WD Limited model.

My time in the Cherokee was brief so I didn’t get a chance to test its off-road abilities or do a full-tank fuel economy run, but the vehicle promises 31 mpg highway with its 2.4-liter MultiAir and 9-speed transmission. In Trailhawk trim has all of the 4WD features that have helped Jeep build and keep its off-road reputation. I’m looking forward to some extended seat time and a chance to see how this model lives up to the Jeep reputation.

6. 2014 Jeep Grand Cherokee EcoDiesel – the survival of the big SUV.  This is almost a no-brainer as well. Take an SUV with a solid reputation as both an off-roader capable machine and a smooth highway

Jeep’s New MPG Tool

operator and boost its fuel economy by 30 percent without sacrificing any performance. The Grand Cherokee, which once boasted a diesel engine borrowed from Mercedes, now gets one from Fiat. The 3-liter V-6 is quiet and powerful (240 horsepower and 420 lb-ft of torque), capable of towing more than competitors’ V-8 engines. It’s fuel economy is 20 percent better than the Grand Cherokee’s base V-6 gas engine and more than 40

percent better than the V-8 option.

Again, I only had a brief drive, but as has been the case with the diesel option in the big German SUVs (Mercedes’ GL, Audi’s Q7 and BMW’s X5), I would expect that this will be a popular option in the Jeep. Chrysler added an 8-speed transmission to the diesel (and other engine offerings) as part of the MPG-boosting package. It looks like with 2014 models where the EcoDiesel is available, prices will start at around $46,000. This is another one I hope to get more time in during 2014 to get a better feel for how it operates in the real world.

7. 2013 Nissan Leaf – still the leading pure electric car. Like my colleague John Faulkner, I spent a week in a Nissan Leaf this year and came away impressed with the car’s capability. We may dwell too much on the shortcomings of an EV when the real story is how much utility they have. With its real-world 70-80 mile range, the Leaf can handle most commutes (especially if workplace charging is available) and make around town trips for days without recharging. I tested its range on one evening excursion and found that, combined with a smartphone app that shows available charging stations, trips at the edge of the range could be handled without stress.

The Leaf takes on the country

In addition to my week with the Leaf, I also had the opportunity to take one on an extended drive from the Nissan plant in Tennessee. That drive pointed out two shortcomings of the car: (1) long-legged drivers taller than 6-foot-2 are likely to find the cabin cramped and less than comfortable, and (2) the Leaf is not really cut out for freeway passing. As is always the case with EVs, you’re going to spend more time calculating the length, terrain and outside temperature on a given trip (compared to a conventional gas car), but the learning curve is short and your experience will quickly raise your confidence for making longer drives. However, it remains an unnerving experience to watch your range steadily drop as you power down the freeway at 70 mph; ironically, it reminds me of the gas guzzlers of the 1960s where you could sometimes see the gas gauge needle move when you got on the accelerator. The Leaf remains a smooth, quiet performer. It’s easy to operate and can actually accommodate five adults, at least for short runs, and still retains some storage space in the rear hatch. Its styling is distinctive without being too eccentric. With the price drop that Nissan engineering this year, the Leaf appears to be reaching an audience beyond the early adopters and is starting to find its way into the garages of folks just interesting in low-cost, low-emissions transportation.

The Leaf remains one of the premier ways of getting there on electrons alone and, at least in California, is one of the models dealers are offering with discount pricing, special lease deals and a variety of options.

8. 2013 Chevy Volt – the best of both worlds.  The Chevy Volt, like the Nissan Leaf, has made its mark in the EV world. Intrepid Clean Fleet Report reviewer John Faulkner called it “the best GM car for the money” and I would be hard-pressed to disagree. From the beginning more than two years ago the Volt has been a bargain given the technology involved in the car. It’s fascinatingly smooth and responsive, delivering a great driving experience along with its excellent fuel economy. Unlike my experience with the Leaf, trip planning was effortless as the gas-engine backup was always available. On the other hand, plugging in regularly made around-town driving a pure electric experience.

I found the Volt very stable in crosswinds, probably due to its low center of gravity created by 435 pounds of batteries arrayed down the center of the car. The electric drive was more than needed for freeway

Volt offers versatility

acceleration. It featured less aggressive regenerative braking than the Leaf, but still managed to extend its EV range. Even with an extended trip, I averaged just under 50 MPG with the Volt. It’s purely a 4-passenger vehicle, but the Volt has good room in the back seat and luxury appointments throughout. The luxury touches differentiate it from the Leaf, which has more of an everyman feel. Of course those luxury touches include options that took the price of the Volt I drove from just under $40,000 to more than $45,000.

It’s a lifestyle choice. The Leaf is a solid second car, potentially a commuter and definitely a go-anywhere-around-town champ. The Volt can do all of that and adds the ability to throw in a long-distance trip (250 miles round trip in my case) as well. Beyond functionality, the Volt does have more luxury appointments and imparts a more upscale aura. It’s not surprising the two models have become the poster children for the move to electric drive.

9. 2013 VW Jetta Sportwagen TDI – a highway cruiser, SUV substitute. Let’s get this out of the way first. I really like diesels. Yes, the fuel is typically more expensive than gasoline. Yes, the stations are a little harder to find. Yes, the engines make a little more noise. But look what they offer in return for these “inconveniences” – great, consistent fuel economy, turbocharged power and, in the wagon version, a luggage-gobbling vehicle that keeps a sedan profile and road manners.

So, Volkswagen in the not-too-distant past had a period when it was known as the “diesel Rabbit” company since that was its best-selling (and almost only) product in the U.S. Those diesels, for those who remember them, were very fuel efficient, but also slow, loud and smelly. Thankfully, as VW enters a new diesel era, those attributes are, like the Rabbit diesel, a thing of the past. Today’s diesels, such as the Jetta Sportwagen TDI I drove, have great highway manners and are smooth around-town performers as well. It’s not hard to see why the vast majority (more than 80 percent) of Sportwagen’s leaving American showrooms sport TDI engines. My test model featured a smooth-shifting 6-speed manual transmission, black leatherette interior and a panoramic sunroof. At its heart (and soul, when you think about it) was a 2-liter, 140-horsepower, 236 lb-ft of torque four-cylinder diesel engine. As sweet as this engine is, delivering a consistent mid-40s MPG on the highway, VW is about to replace it next year. The new model will be smaller and lighter, get better fuel economy but produce more power and have even lower emissions.

The lack of options on my test Jetta kept its price down ($28,390 including destination charges), but other than an HVAC system that seemed overmatched by the California-Nevada deserts even in springtime, it didn’t seem to be missing much. The car was a comfortable highway cruiser, topping its EPA 42 MPG highway regularly even with the speedometer pegged between 75 and 80. Around town it delivered the 34 MPG as advertised and offers the height of functionality in a compact package.

10. 2013 Smart ED – finally getting it right. Up front, I should disclose that I owned a gasoline Smart for several years. I had no issues with the car, although it was limited in use because of its size. Smart cars are not long-distance highway runners and with only room for one passenger and several grocery bags, taking one on a Costco run would only end in frustration. So, in some ways, the Smart is one of the most logical cars to turn into an EV. Of course, it doesn’t hurt that its design from the beginning is suited for electric drive and other alternatives. Daimler AG’s decision to electrify the Smart makes sense since it already has limitations like most EVs – it’s primarily a city car built around short trips, tight parking places and fuel economy-minded individuals.

Mercedes-Benz,Smart,electric car, Smart EDThe Smart ED I drove this year represented the third generation of the electric Smarts, one that finally appears to have nailed it. The first round used zinc-based batteries that caused a variety of issues, according to reports at the time. The second generation, which I drove last year, leveraged Daimler’s relationship with Tesla for battery management and related technology. My brief drive at the time left me wondering whether Tesla really would make it (a concern since answered by the company’s solid performance this year). It lacked power, was wholly inadequate on the highway and just seemed ill-suited for anything but short, flat city drives.

Thankfully, the third generation of one the most oddly named (check out the disambiguation under “health”) cars on the market appears to have things sorted out. Daimler has again changed batteries (now a 17.6 kWh package from Deutsche ACCUmotive) and uses a 55 kW electric motor that I am happy to report from a short drive is more than adequate to California’s typical roads. Though only boasting a 60-80 mile range and costing almost double the gas version of the Smart, the Smart ED deserves a look for those into a city car lifestyle. The range is not an issue running around most urban areas and Smart is already running discount deals like the other EV makers.

Small but finally right.

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That’s my 10 best, most-interesting vehicles of the year that I had the pleasure of piloting. It is not everything I have driven or written about and unfortunately one of the downsides of this kind of format is that some deserving cars get left off for no reason other than they’re the 11th or 12th most interesting cars of the year. In a field with the potential of hundreds of vehicles, ranking that “low” is not really a negative mark, so here are a couple just below the Top 10.

One that my colleague John Faulkner has had a chance to evaluate fully is the Jetta Hybrid. I was fascinated by the technology involved. Unlike many other hybrids out there, the Jetta focuses not only on fuel economy (which it delivers quite well, though I was never able to equal the EPA highway or combined ratings of 48 and 40 MPG) but also on performance. The turbocharged engine delivers great low-end torque and also was responsive throughout the powerband. Jetta’s hybrid features aggressive regenerative braking a feature that was unnerving at first – coasting on the highway the engine will shut off, then instantly restart whenever you touch the accelerator.

Another model that didn’t make my list, but is worth mentioning in a positive light is the latest version of the Honda Civic Natural Gas. Having been in earlier versions of the Civic GX, I was expecting to be underwhelmed. The experience was just the opposite. The Civic running on natural gas was as close to a gasoline Civic as one could expect. Filling up on CNG is getting easier as well, though I still consider this model as much of a challenge as an EV and in some ways even more because of lack of development of a home refueling infrastructure.

Those two are relatively easy (and I could probably expand the list as well), but there were also two vehicles I experienced this year that not only would not make my Top 10 list, they would be unlikely to end up on my recommended list at all. That said, both vehicles have their adherents.  The Mitsubishi i-MiEV and Prius c are two vehicles that live at the bottom, price-wise of their respective classes. Unfortunately, my experience with them only reinforces that sometimes you get what you pay for.

The i-MiEV is the adaptation of a Japanese market vehicle and while the changes for this country are noticeable and positive, it’s not enough to make this a competitive vehicle among electrics. With the price wars, EV affordability has become something of a level playing field and Mitsubishi’s competitors offer much more in vehicle comfort and features. It’s not that the i-MiEV is not a competent and functional electric car. It works, but acceleration lacks what is found on the Fiat 500e or RAV4 EV. Its steering is somewhat vague after driving European or most American sedans. If there were no other EVs out there or no other price competitive EVs, you could probably make a case for the i-MiEV, but that is not the case.

The smaller Prius – less is less

My time in the Prius c was limited, but I did get a chance to give it a pretty thorough challenge on the road, heading up over the Laureles Grade in Carmel Valley and hitting some high-speed roads around Monterey. The “c,” which adopted the Prius name even though it is based on the smaller Yaris platform, is a compact car based on the EPA’s interior volume characterization, but it feels more like a subcompact. Toyota advertises the “c” as the “snug Prius,” which I can’t argue with. It’s small and has a proportionately small engine that didn’t appreciate the extreme grade I pushed it up. Handling also seemed kind of soft, but not out of line for Toyota’s approach to the U.S. market.

The Prius c’s main appeal seems to be its low price. Since its introduction, the “c” has been the entry-level Prius, allowing the larger original Prius to move upward in price and options. It does deliver on fuel economy, but for me the sacrifice in performance and space is not worth the meager savings.

My final category is a twofer – the prototypes I’ve driven and the ones I’m looking forward to in the coming year, some of which are the same. First up is the E-Golf, which I’ve driven in several prototype forms over the past couple years. The models I’ve driven seemed ready to head to the showroom, but it will probably be late next year before the electric Golf shows up on these shores. I did take a short drive in the Chevy Spark EV (and John Faulkner gave it a full review). I plan to put some time in one soon to see how it fits in the developing hierarchy of electric cars. My initial impression is pretty positive. Of course, high on my list of unobtainium is the Tesla Model S. I have a neighbor with one and see them daily (haven’t seen one on fire yet–that’s a joke, Elon), but haven’t given one a proper test, although again all reports I’ve seen and heard have been quite positive. And add the new fuel cell Hyundai Tucson that goes on sale this spring. And I’m sure there will be some good surprises as well. Happy New Year, indeed!

Story & Photos by Michael Coates

Posted Dec. 30, 2013

Other related stories you might enjoy:

Top 10 Best-Selling High MPG Cars of 2013

Top 10 Best Fuel Economy Cars of 2014

Hydrogen Fuel Cell Electric Cars Go On Sale in 2014

GM & Toyota Go Opposite Directions Pricing Their Plug-ins

GM & Toyota Go Opposite Directions Pricing Their Plug-ins

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Cadillac’s Pricey ELR

Cadillac ELR Starts High; Toyota Prius Plug-in Gets Lower

This week saw two of the largest auto companies in the world going two different ways when it comes to pricing their showcase plug-in electric cars. General Motors announced that it would price its extended-range electric Cadillac ELR at $75,995 when it goes on sale in January 2014. In contrast, the same week Toyota announced that it was dropping the price on its 2014 Prius Plug-in, which it considers the epitome of its current offerings. Price drops ranged from $2,000 on the base model to $4,620 on the Advanced version. With the price reduction, the Prius Plug-in now has a starting price before government incentives just north of $30,000.

The contrast couldn’t be more stark. GM, which recently announced a price drop on the technically similar (to the ELR) Chevy Volt of $5,000 to drop its base price below $35,000. The price drop was announced for the 2014 Volt and applied retroactively through incentives to 2013 models still on the lot. GM was quoted as saying “great strides in reducing costs” had contributed to the price cut. Whether those “strides” were applied to the ELR remains to be seen. At more than twice the cost of a Volt, it leads to speculation that the ELR may represent a more true representation of the costs of producing the Volt/ELR platform, underscoring what GM has said all along–that it had no expectations of making a profit on the first generation of its plug-in model.

However, the next generation of Volt and ELR are supposed to include further cost reductions and make the platform profitable. According to Automotive News. GM’s CEO Dan Akerson has said he expects a $10,000 per unit reduction in Volt costs in the next generation, which is due in late 2015 or early 2016. In the interim, GM appears to be looking to the ELR to help recoup the sunk costs of the first generation models. Although recent sales numbers have picked up for the Volt, its overall sales numbers have failed to reach the high level predicted at its launch.

The other problem for the ELR is that its $75,000 price puts it clearly in Tesla Model S territory, a larger pure electric that has quickly established a reputation as the poster child for EVs. GM, gun shy after the shortfall with Volt sales predictions, has been reluctant to predict sales numbers for the ELR, preferring to position it as a halo car for the division. Although it has the same range-extending four-cylinder 1.4-liter gasoline engine as the Volt, the ELR prefers to focus on its upscale features such as LED head and taillights and handcrafted leather and wood interiors.

The ELR also will feature the Regen on Demand feature that allows the driver to temporarily recapture energy when coasting by using the vehicle’s steering wheel shift paddles. It’s safe to say that at the published MSRP the ELR will not be moving too many units other than to the Cadillac faithful and some tech lovers.

toyota-prius-plug-in-price drop

Toyota drops the plug-in price

Over at Toyota they have sold less than 8,000 Prius Plug-ins during the first nine months of the year after strong August and September sales as due to cut-rate financing and lease deals. The price cut brings 2014 prices more in line with current transaction prices. Even though the Prius Plug-in was third best-selling plug-in for the month of September, the price cut follows similar discounts from GM on the Volt and Nissan on the Leaf as well as lease deals on Chevy’s Spark EV, Fiat’s 500e, Ford’s Focus Electric, Smart’s ED, Honda’s Fit EV, Mitsubishi’s i-MiEV and Toyota on its pure electric RAV4 EV.

The range of technology available with the Prius Plug-in is impressive, including premium HDD navigation and JBL speakers, SofTex-trimmed heated front seats, 8-way power-adjustable driver’s seat with power lumbar support, head-up display and Safety Connect. That adds to the 2013 Prius’ DRCC (Dynamic Radar Cruise Control), PCS (Pre-Collision System), LED headlights and fog lights.

The Prius Plug-in is currently available in 15 states (California, Oregon, Washington, Arizona, Maine, Massachusetts, Vermont, New Hampshire, Rhode Island, Connecticut, New York, New Jersey, Maryland, Virginia and Hawaii). It’s EPA rating is 95 MPGe in electric mode or 50 mpg in hybrid mode. It has an 11-mile electric-only mode.

The electric car and plug-in car market (two distinct but related parts of the new developing car market) is still in its infancy. Advocates see demand exceeding supply whenever prices are dropped down to be competitive internal combustion engine vehicles (as happened with the Honda Fit EV). Detractors see the fire sale prices as auto companies blowing out unwanted inventory the same way they always have. Some automakers grumble about mandates coming from California for zero emission vehicles while others show enthusiasm for electric cars as the way of the future. This story continues to be written and it’s not clear anyone knows what the ending will be.

For more on the electric car market, see:

Electric Car Deals May Threaten Segments Future

Top Selling High MPG Cars During Jan-Aug 2013

Top 10 Electric Cars You Can Buy

Electric Car Deals May Threaten Segment’s Future

Electric Car Deals May Threaten Segment’s Future

nissan-leaf-plug-in-sales-leader

Better Deal or Bitter Deal

While price cuts and low lease rates have been moving electric cars like never before, resulting in “sold out” models and tight supplies at some dealerships, there may be a dark side to the deals. Last week, ALG Inc., the organization recognized by the auto industry as the arbiter of the residual values for vehicles, cut those values for electric vehicles, plug-in hybrids and conventional hybrids because of high incentives, price cuts and a potential glut of models, according to a report in Automotive News.

As an example, ALG dropped the predicted residual value of a Nissan Leaf after 36 months by about $2,500. ALG values are used by banks so any rates using residual values above theirs mean the manufacturer is subsidizing the lease, which of course negatively impacts income from a vehicle. A drop in residual value like the one for the Leaf could typically raise the lease rate by $70/month.

The Leaf hasn’t been the only one dropping its retail prices, as we have noted at Clean Fleet Report. Volt dropped its price on the 2014 model by $5,000, which of course resulted in price drops for the 2013 models still on the lot. Honda’s Fit EV, Smart’s ED, Mitsubishi’s i-MiEV, GM’s Chevy Spark EV, the Fiat 500e, the Toyota RAV4 EV and Ford’s Focus Electric all have discounted lease deals aimed to boost sales. And more new models are coming on the market during 2014, including the BMW i3 and Golf-e, with the former’s announced price indicating an aggressive marketing stance by BMW.

When discounts like this happen in the rest of the auto market and residual values drop, the impact on auto companies is clear. Profits on the discounted vehicles drop and the models are often dropped or given a redesign aimed at revitalizing or repositioning them in the eyes of the consumer. For new models, it is often the kiss of death.

The concern ALG expressed reinforces talk in the auto industry about the overall weakness of the alternative fuel vehicle segment. Since several automakers have said bluntly that the vehicles are being produced solely to comply with government mandates (California’s ZEV Mandate being the main target), many have questioned their sincerity in marketing the cars or commitment to produce vehicles if there is consumer demand beyond the mandated volumes. The exception to this sentiment appears to be Nissan, led by its CEO Carlos Ghosn, who has put his company (along with partner Renault) on record as aiming for mass market electric vehicles by the end of the decade.

So the lower prices have been moving electric cars at a quicker pace than the rest of the market (overall sales numbers, though, can be characterized as miniscule but promising). Chrysler said that after offering the Fiat 500e

fiat,500e,electric car

Fiat 500e – Sold Out or Sell Out?

for the same lease price as its gas-powered models, its 2013 allotment of vehicles was sold out (though it declined to specify how many cars that was). Honda dropped its lease price on the Fit EV, which had been languishing on dealer lots, and suddenly the cars moved and dealers were clamoring for more. EV advocates used these incidents as examples of pent-up consumer demand for electric cars while automakers shrugged them off as fire sales that brought no return to the company.

Our conclusion: The drop in EV residuals is not a death sentence, but not a good sign. Residual values can change, as this drop shows, but the Leaf and the rest of the industry will need to show some sustained strength, as in substantial sales not propped up by lease deals and price drops.  It’s far from a sin in the auto industry to discount models or offer incentives to move them, but because electric cars (and plug-ins and hybrids) are a new segment and still viewed somewhat skeptically by the industry, they have more pressure to be competitive. Remember, it took several years for the Prius to achieve a sales status where it was seen as anything other than a West Coast novelty, and now it sits among the top 10 of all cars in sales – after only 15 years on the market. This is a marathon, not a sprint.

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How to find the best price for an electric car

Electric Car Price Wars — Part 2

Chevy, Volt, plug-in hybrid

Chevy Volt Drops Its Price for 2014

Consumers interested in plug-in cars got more good news this month as the Mercedes-built Smart and Chevy Volt both joined the recent moves to drop prices on their models. The Smart dropped lease prices to $139/month, substantially below much of the competition. General Motors in turn announced the Volt’s price was being lowered by $5000. The actions follow similar moves by Nissan for the Leaf, Honda for its Fit EV and Fiat with the 500e, among others, and the announcement that the all-new BMW i3 electric car would start at $41,350 in the U.S.

That latter price was thought to be the catalyst for the Volt move, although it is very early in the electric car market to be attributing pricing countermoves to automakers. That said, the Smart price drop was clearly a reaction to the $199/month lease prices being promoted by Fiat (for the 500e), GM (for the Spark EV) and Nissan for the Leaf. In the same way the gasoline-powered two-passenger Smart is generally priced below the gasoline versions of those four-passenger competitors (or in the EV-only Leaf’s case, the Nissan Versa), it’s clear that Smart needed to drop its lease price to keep consideration of its Smart ED in the mix.

2013 smart,low price, electric car

2013 Smart Electric Drops Lease Price

The Smart ED is the third generation electric car from the Mercedes-Benz sub-brand. It’s substantially improved from earlier versions with stronger performance, but is likely to struggle as its gasoline sibling does since the market for two-passenger cars is limited. Its appeal right now is as the lowest price electric car you can buy. Since most pure electrics are urban-oriented, limited use vehicles (with Tesla’s Model S the pricey exception), the diminutive Smart could yet find a niche. Dealers are reportedly getting additional marketing incentives that could lower prices even more.

Volt Price Drop

They Chevy Volt is in a different place. Since their almost simultaneous introductions, The Volt and Leaf have battled for sales leadership in the plug-in category, though this year the Tesla Model S has been challenging them.  Nissan moved Leaf production from Japan to its Nashville, Tenn., plant this year and has started battery production there as well. The moves allowed Nissan to drop the Leaf price by $6,400 this year, which boosted sales by 2-3 times 2012’s level. Nissan also just announced that they have the capacity to increase Leaf production if sales remain strong or improve.

The Volt with its range-extending technology jumped out to an early lead over the pure-electric Leaf in sales last year, but the race has tightened this year with GM offering lease deals on the Volt to keep it competitive with the Leaf. GM claimed the price drop was possible because of manufacturing efficiencies, but it appears that market pressures may have been the prime motivator of the move. Along with the announcement of the $5,000 price drop for the 2014 model, GM also instituted a comparable $5,000 consumer rebate on 2012 and 2012 models that are still on dealer lots.

General Motors has consistently said it doesn’t expect to make any money on its first generation of the Volt, but hopes to change that with increased volumes and reduced costs with the next generation, due in 2015.

Getting the Same Treatment

As we noted in an earlier article, plug-in cars are starting to get the same treatment in the marketplace that conventional vehicles regularly do – garnering incentives and price adjustments based on consumer response to the vehicle. The additional pressure that electric cars face is that at present none of the models on the market are creating profits for the automakers, so incentive money or price drops add to an existing deficit. As is the case with any model, that strategy cannot play out long term.

In the interim consumers have a great opportunity with little risk (particularly in lease offers). Federal and state incentives added to lowered prices and special deals have brought electric cars into the same prices range as not only hybrids, but even regular gas models, particularly when operating costs are factored in. So the bargain choices are as follows (this is for pure electrics; of course, some of the models have limited availability at present) along with some of the variety now offered (most of the initial EVs on the market are subcompact or smaller cars):

Lowest Price: Smart ED, $139/month lease

Lowest Price 4-passenger: Chevy Spark EV, Fiat 500e, Ford Focus EV, Nissan Leaf – all at $199/month lease

Convertible Electric Car: Smart ED Cabriolet

Electric SUV: Toyota RAV4 EV

If you expand your search to include plug-in hybrids such as the Volt, your choices expand significantly with wagons such as the Ford C-Max Energi, midsize cars such as the Ford Fusion Energi or Honda Accord Plug-In or a plug-in version of the best-selling hybrid, the Toyota Prius Plug-In.

And next year the market will expand even more with new plug-in cars from Volkswagen, Mitsubishi, Cadillac, Porsche and Infiniti, among others.

Other similar articles you might find interesting:

Electric Car Price Wars

The Top 10 Electric Cars You Can Buy

Top 10 Best-Selling High-MPG Cars

Electric Cars Are Cleaner Today & Will Only Get Cleaner

Electric Car Price Wars

Electric Car Price Wars

The beginning of the end or the end of the beginning?

fiat,500e,electric car

Fiat 500e – Sold Out or Sell Out?

Cut-throat price wars are common enough in the auto industry, but ones that include green cars are pretty rare. Remember, these are the cars that several auto makers have been quick to say they would lose money on and, on top of that, were not sure consumers would buy at any price.

Maybe it’s a function of the expansion of the market; as noted earlier, there are now 10 different pure electric models for sale from major manufacturers. That kind of competition in an admittedly early market doesn’t bode well for margins.

So the headlines have quickly turned from “Who will buy these electric cars?” to “Electric cars are sold out.”  Automakers generally (Nissan and Chevrolet are the exceptions) not committed to produce large volumes of these vehicles for the reasons they are quick to enumerate–the market is uncertain, the vehicles’ retail cost is high and production cost even higher and the functionality of the cars is significantly less than a typical gas or diesel-powered alternative.

The flip side of those arguments made by EV-advocates is a mirror image–there is a large pent-up demand for alternatives to the internal combustion engine, early versions of new technology may lose money but the volumes will increase and profits will come, and the functionality of a typical electric car serves the majority of uses most people use their cars for on a daily basis (and alternatives are readily available for the exceptions).

The truth lies somewhere in between these two extremes. Nissan and Chevrolet, along with BMW, appear to be strongly committed to electric mobility, though all three are taking different paths. Nissan is aggressively pricing its Leaf electrics, increasing local production to lower costs, adding battery capacity and features to new models. The Leaf and the extended range electric Chevy Volt have been trading the top spot in sales during the past year with the latest clash echoing the way auto companies typically respond to a marketplace challenge–match your competition’s pricing.

Tesla the exception

Only Tesla with its high-end Model S appears to be immune from the down-and-dirty of retail selling, but they are still in the mode of producing cars to fill existing orders and are in the process of expanding to overseas markets.

So, back in the showrooms, Honda’s Fit EV and Chevy Volt both announced new, lower lease rates. Nissan lowered the Leaf retail price. The Ford Focus Electric, Chevy Spark EV and Fiat 500e already had lease rates as low as

honda,fit EV,electric car, sales

Honda Fit EV – Popular Now

many conventional cars. The result: reports that the Fit EV and 500e were “sold out.” For electric car advocates, it was vindication of their faith in the market. Automakers shrugged, however, as both Honda and Fiat said they would not increase production on a car on which they were losing money ($10,000 per vehicle according to Fiat CEO Sergio Marchionne). Toyota with its RAV4 EV and BMW with its Active-E model similarly have limited production, but don’t appear to be concerned about sales and have stayed out of the retail price wars.

Mitsubishi i-MiEV volume low

The odd man out here appears to be the Mitsubishi i-MiEV. Sales of the small electric car have been quite low, averaging a little less than 150 per month during the first half of the year. They are also running special offers and recently closed a deal to send 50 units to cities in Santa Clara County in Northern California.

Of course, another driver in these price wars is knowledge that further competition is coming. Next year the BMW i3, Mercedes B-Class E-Cell and Golf-E are due to hit the market. Along with that several new plug-in hybrids should be for sale, so consumer choice is only going to expand. The electric car market doesn’t appear to be going away anytime soon. So, it appears the thought by automakers is to lock in as many consumers now as early as possible. The good news is the competition has created some real bargains and the potential to lower the up-front cost to the point where an electric car suddenly makes economic as well as environmental sense.

Additional stories on the subject you might like:

The Top 10 Electric Cars You Can Buy Now!

Ford Focus Electric-First Drive

Fiat 500e road test