Car Companies In The Fast Lane To Save On Gas

For an auto technology that's been on the drawing board for more than a century, the hybrid achieved little traction.
The roots of hybrid cars date to 1898 when Ferdinand Porsche built an auto that had a combustion engine and four electric motors.
It wasn't until Japan's Honda (HMC) introduced the two-door Insight in 1999 that the car industry put the pedal to the metal.
The auto industry is shifting into sixth gear. The drive to conserve oil and improve mileage has carmakers pushing new engine technologies. Cars are also more tech savvy, packed with advanced entertainment and guidance systems that can make a trip to the grocery store feel like a first-class ticket. In this special section, IBD has the road covered on what's ahead.
Today, a dozen hybrid models are on the road. About 270,000 were sold last year, but that's just 1.6% of U.S. light-vehicle sales, according to J.D. Power & Associates.
Still, the hybrid is here to stay. More models are coming, and American car companies, after getting off to a slow start, are speeding up. Japan's Toyota (TM) has triple the number of hybrids as U.S. companies, which have just three models on the road.
"General Motors (GM) is shifting toward hybrids because they realize hybrids are here to stay," said Alex Rosten, an analyst at Edmunds.com, a provider of automotive education. "GM has a significant number of models they will release with the '08 model year."
Hybrids — which combine a gas engine with battery power — are one of an emerging class of vehicles seen as supplanting gasoline-burning combustion engines. The idea is to create fuel-efficient cars and reduce dependence on foreign oil.
"High gas prices, coupled with consumers becoming more familiar with alternative (engine) technology, are definitely increasing consumer interest in hybrids and flexible fuels," said Mike Marshall, director of automotive emerging technologies at J.D. Power.
The most widely sold vehicles in the flexible fuel class run on E85, a combination of 85% ethanol — made from corn — and 15% gas. More than 5 million cars on U.S. highways run on E85. There are 17 models available in 2006 and 21 are planned for '07, according to J.D. Power.
Down the road are cars that run on hydrogen-powered fuel cells. Hydrogen is the most abundant element, found in water, fossil fuels, methanol and natural gas. Getting energy out of it requires an electrochemical device — a fuel cell — that produces electricity.
The technology is proving to be stubborn. The cars remain in test phase, and no one can say for sure when they'll go on sale.
For now, hybrids and ethanol-based cars are kings of the fuel-saving road. Hybrids are valued for high gas mileage — as well as being environmentally friendly. Some hybrid cars are said to get close to 60 miles per gallon — more than double what most cars get.
The drawback for consumers is that the cars are more expensive to make vs. those that run on gas only. Hybrids cost an extra $3,000 to $10,000. Tax incentives can lop off about $1,500 of the price tag.
• As to the fate of cars that run on E85, that depends on two factors: promotion and E-85 fuel pumps.
For consumers, driving with ethanol has little to do with mileage. While a gallon of E85 is cheaper than gasoline, the cars get 15% fewer miles per gallon. That adds up to no cost saving. "Our research indicates the main motivator for an ethanol car is having less dependence on foreign oil," said Anthony Pratt, an analyst at J.D. Power.