Are Automakers Ready for 54.5 Miles per Gallon?
A few days ago, the good ‘ole duo of the Environmental Protection Agency and Transportation Secretary Ray LaHood declared that fuel efficiency standards in the U.S. were going up – way up. Existing standards require all new cars and small trucks to meet a Corporate Average Fuel Economy (CAFE) of 34.5 miles per gallon by 2016, and the new announcement increases this mark to 54.5 mpg by 2025. Considering the fact that the most recent measurements taken by the Bureau of Transportation Statistics place new vehicle fuel efficiency at a slice under 30 mpg, and it’s clear that automakers have quite a ways to go over the next 12 ½ years. Some companies are more prepared for these stringent standards than others. We’ve already covered Tesla Motors (seen here), so this article will discuss the plans of the other large-scale automakers that are publicly traded on American exchanges.
Ford Motor Co. (NYSE: F)
While most green energy enthusiasts wouldn’t tout Ford as their savior, the company actually manufactures the most fuel efficient SUV on the market in the Escape Hybrid, and has Prius-killing plans with the C-Max Hybrid. Available to European drivers since 2003, the C-Max is in its first production year in America. The hybrid vehicle is EPA-certified at a combined mpg of 47.0, beating the Prius V by 12%. At a base cost of just under $26,000, the C-Max is also one of the most reasonably priced hybrids on the lot.
Toyota Motor Corp. (NYSE: TM)
Speaking of the Prius, Toyota’s hybrid sedan is in its twelfth production year in U.S. markets. Officially the world’s first mass-produced hybrid vehicle, the Prius is currently available in the V Model (42.0 mpg), the C Model (50.0 mpg), and the PHV Model. The latter, also known as the Prius Plug-in Hybrid, is able to operate on all-electric power at higher cruising speeds than its predecessors. Remarkably, it is EPA-certified at 95.0 mpg in its all-electric mode, and still able to achieve an average of 50.0 mpg in its most gas guzzling form.
General Motors (NYSE: GM)
General Motors offers an array of hybrid vehicles, including the GMC Sierra 1500 Hybrid, the Chevy Silverado 1500 Hybrid, the Cadillac Escalade Hybrid, and the Chevy Tahoe Hybrid; each model offers a ubiquitous fuel efficiency of 21.5 mpg. While it’s very tempting to imagine one’s self gallivanting around town in an Escalade that finally gets decent gas millage, GM’s real contribution to the new CAFE standards is its Chevy Volt. Since hitting the markets in late 2010, GM has sold nearly 20,000 of its plug-in hybrid model, which has just set a monthly sales record in August. While fuel economy measurements vary, GM executives estimate that a driver who commutes 60 miles a day will achieve an effective efficiency of 150.0 mpg, assuming the first 40 miles are driven in all-electric mode. Considering that the Volt has an all-electric range more than twice as large as the Prius Plug-In, it’s easy to see why consumers are clamoring over the car.
Honda Motor Co. (NYSE: HMC)
In an effort to appease all of the Civic-lovers out there, I’ll briefly mention that Honda does offer a hybrid version of its popular small-sized sedan, though a 26.5 mpg makes it far from a world-beater. Interestingly, the Japanese automaker also manufactures the Honda Insight (42.5 mpg), and the Honda CR-Z (37.0 mpg). The latter is perhaps the sportiest hybrid on the market. In other words, if the Prius and Porsche somehow produced offspring, the CR-Z is what it would look like. Throw in the fact that it is the only hybrid on the market that can be outfitted with a manual transmission, and this analogy makes even more sense.
While these four automakers only represent a portion of the overall hybrid market, their stocks are the most readily available for American investors to purchase. Check back at WealthLift INSIDER for a second take on this subject that will cover OTC-traded companies like Nissan, Daimler, Volkswagen, and Volvo.
Disclosure: The author has no holdings in the stocks mentioned in this article and has no plans to initiate any positions within the next 72 hours. He does, however, have the intention of rating these stocks on WealthLift.com, a social media website where investment ideas are shared openly and free.