www.msnbc.msn.com/id/12958916/site/newsweek/page/2
This week, Honda revealed that it is developing a new hybrid coming in 2009 that will be cheaper than a $22,000 Prius and smaller than a Honda Civic (though it is still expected to seat five). What has Honda learned from the sputtering Accord hybrid? "It's about fuel economy, stupid," says Honda senior vice president John Mendel. If I'm going to pay the hybrid up-charge, I want better fuel economy." Toyota officials insist there's nothing wrong with its hybrid strategy, even though they've also slapped a cut-rate financing deal on the Highlander hybrid to get it moving. But they do acknowledge they're considering tinkering with the Highlander's styling to make it stand out more as a hybrid. Other than the Prius, most hybrids are nearly indistinguishable from other cars on the road, with nothing more than a small badge on the back or perhaps a special spoiler to denote it's a green car. Well, it turns out that hybrid drivers would like everyone else on the road to know that they are saving the planet (even if they're not saving that much at the pump). So future hybrids will be customized to look different than their nonhybrid counterparts. "The Prius makes a statement that gives people a feeling of pride in owning a hybrid vehicle," says Toyota spokesman John Hanson. "We've learned the Highlander hybrid owner wants to make that statement, too." Besides the cosmetics and economics, there's another complicating factor for calculating whether a hybrid is worth it: the Environmental Protection Agency's mileage mythology. As many drivers have discovered, the EPA mileage on the window sticker of a new car is miles from reality. For example, the Prius promises 60mpg, but Consumer Reports found it only gets 44 mpg. The EPA is now rejiggering its outdated methods for estimating mileage-which, among other things, don't factor in using the air conditioner or driving above 40mph. But until those come out next year, the stickers on the windows of hybrids will continue to be off by 30 percent or more. Consumer Reports this week released a new poll showing that one third of car buyers say that high gas prices are driving them into more fuel-efficient cars, primarily hybrids. The problem, say dealers, is that once consumers get to the showroom, they realize hybrids aren't such a good way to save on gas after all. "Hybrids have gone soft because people are doing the math," says Toyota dealer Gordon Stewart. When the price premium falls below $2,000, analysts say the payoff will come quicker (if you factor in the hybrid tax credit you receive which ranges from $650 to $3,150, depending on the model). For now, the new Toyota Camry hybrid has the lowest premium of about $2,600, and dealers say buyers are lining up for it. Honda says it is working to radically shrink the size of its batteries and other hybrid components, which will vastly improve gas mileage. And as more hybrid models hit the market, prices are bound to drop as the competition heats up. That's why analysts project that hybrid sales will nearly quadruple to 750,000 units by 2010. Still, even at those lofty sales, hybrids will only account for 4 percent of US auto sales. SUVs, by then, will still represent about one fifth of the market. If you're really interested in saving money at the pump this summer, there is a far cheaper way. Go out and buy one of the new little gas-sippers hitting the market now. The Honda Fit, Toyota Yaris and Nissan Versa get up to 40mpg and start at less than $15,000-at least five grand cheaper than the least expensive hybrid. If you want to buy American (sort of), consider the Chevy Aveo (built in Korea), which gets 35mpg on the highway and starts at under $10,000. These cars might not dazzle your friends with their sci-fi technology. But the payoff at the pump comes right away, not a long way down the road.
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